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Edited version of private advice
Authorisation Number: 1052380512978
Date of advice: 2 April 2025
Ruling
Subject: CGT - 15-year exemption
Question 1
Do you meet the basic conditions for relief for the small business entity capital gains tax concessions under Subdivision 152-A of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
You meet the basic conditions for relief as outlined in Subdivision 152-A of the ITAA 1997 as you are a small business entity, and the property meets the active asset test in section 152-35 of the ITAA 1997.
Question 2
Are you eligible for the small business 15-year exemption under section 152-105 of the ITAA 1997?
Answer
Yes.
You meet the conditions to apply the 15-year exemption in section 152-105 of the ITAA 1997 as you satisfy the basic conditions in Subdivision 152-A of the ITAA 1997, you owned the property for more than 15 years, you were over 55 and the sale was made in connection with your retirement.
This ruling applies for the following period:
Year ending 30 June 20YY
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
You purchased a residential rural property with your spouse more than 15 years ago.
The property is approximately 20 hectares.
You and your spouse engaged in expanding the property structures to support a primary production business.
You ran the business as a sole trader. Your spouse had full time employment.
The business holds professional registration and has its own website.
You operated the business for more than 15 years on the property.
The annual turnover of the business is under $2 million.
You work closely with your spouse in all day-to-day operations and decisions of the business.
As part of your transition to retirement you and your spouse decided to sell the property.
During the year ended 30 June 20YY you entered a sale contract for the sale of your property.
You were over 55 years old when you signed the contract of sale.
Settlement is to occur 60 months from the contract date.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 152-A
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 section 152-40
Income Tax Assessment Act 1997 section 152-47
Income Tax Assessment Act 1997 section 152-105
Income Tax Assessment Act 1997 section 328-130
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