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Edited version of your written advice
Authorisation Number: 1051320408665
Date of advice: 13 December 2017
Ruling
Subject: CGT small business concessions
Question
Does the farming property meet the criteria of the active asset test contained in section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
To access the small business capital gains tax (CGT) concessions, an entity must first satisfy the basic conditions in section 152-10 of the ITAA 1997.
One of the basic conditions requires the relevant CGT asset to satisfy the active asset test in section 152-35 of the ITAA 1997.
This test requires the CGT asset to be an active asset for:
● seven and a half years, if owned for more than 15 years, or
● half of the ownership period if owned for 15 years or less (section 152-35).
In your case, you owned the property for a total of X years and operated the farming business yourself for more than seven and half years. Therefore, as the property has been active for more than seven and a half years, you satisfy the conditions of the active asset test.
This ruling applies for the following period:
Year ended 30 June 2017
The scheme commences on:
1 July 2016
Relevant facts and circumstances
You purchased a farming business in 199X.
You operated the farm for approximately X years.
For a period of X years you did not operate the farm, the land was offered to the neighbouring farm for agistment.
You recommenced the farming business and operated again for X years when the business and land were sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 152-10 and
Income Tax Assessment Act 1997 Section 152-35.