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Edited version of your written advice
Authorisation Number: 1051452180930
Date of advice: 18 January 2019
Ruling
Subject: Small business 15 year exemption
Question 1
Can you disregard the capital gain made on the disposal of your property under the small business 15 year exemption?
Answer
Yes. You can disregard the capital gain made on the sale of the active asset as you have met the basic conditions, are over 55 years old and you have owned the active asset for more than 15 years. The Commissioner also considers that the CGT event has happened in connection with your retirement. Further information can be found by searching 'QC 52288' on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 20xx
The scheme commences on:
1 July 20xx
Relevant facts and circumstances
Background information
You are over 55 years old and work an average number of hours per week.
The Property and the Business
In 20xx you acquired a property.
You carried on a business using the whole property. You spent an average number of working hours for the business.
The business was at a loss for a number of years. You funded and subsidised the poor income performance of the business with the income you derived from your other work.
You found that it was not practical for you to reduce the existing commitments in your profession until after the business was sold.
The CGT Event
You entered into a contract to sell the business and the property. The transaction was settled.
Taxpayer activities
You had no further involvement with the business after the settlement under the contract occurred.
Prior to the sale of the business, you spent hours working for the business and your profession.
You will be reducing your working hours. You will work progressively towards reducing the time spent, and the income derived from your profession. You will retire fully in a few years.
CGT assets
There are entities connected with you.
You do not have any affiliates.
The total net value of your CGT assets of your connected entities are less than $6 million.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-105
Income Tax Assessment Act 1997 paragraph 152-105(d)