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Edited version of private advice
Authorisation Number: 1052364840055
Date of advice: 24 February 2025
Ruling
Subject: CGT - active asset
Question 1
Does the property satisfy the active asset test under section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer 1
Yes. The Trust has owned the property for over X years and the main use of the property was not to derive rent for more than half the ownership period.Therefore, we consider the property owned by the Trust to be an active asset.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The Trust purchased the property more than X years ago.
There are a number of sheds located on the property under a single title.
The trust used one of the sheds for a business and rented the remaining sheds to non-related parties from the purchase date.
The business involves contracting and preparing structures and installing them at external sites, plus storage of all the equipment and tools.
The shed is used daily for constructions and sorting of designs before it is move to the site for installation. It is also used for storage of all equipment.
Client meetings take place on the premises whenever there is a new client engaged. The amount of meetings vary from weekly to monthly depending on the size of the jobs.
The shed used to operate the business earns more than half of the income received in relation to the property for the relevant financial year financial years.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 section 152-40
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