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Edited version of private advice
Authorisation Number: 1051531369275
Date of advice: 26 June 2019
Ruling
Subject: Capital gains tax and the small business concessions
Question 1
Does the goodwill satisfy the active asset test?
Answer
Yes
Question 2
Can you apply the small business rollover to the capital gain on the sale of the goodwill?
Answer
Yes
You satisfy the conditions of the active asset test as you have used the asset for at least half of the test period in the course of carrying on a business and the exceptions do not apply. You can apply the small business rollover to the capital gain on the sale of the goodwill. Further information can be found by searching 'QC 44192' on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 2019
The scheme commences on:
1 July 2017
Relevant facts and circumstances
The Company is selling its goodwill for $X. There is no cost base. The company has used the goodwill in its business for 10 years.
The Company's net assets are less than $6,000,000 and its turnover is $X.
The Company wishes to apply the small business active asset reduction and rollover.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-10,
Income Tax Assessment Act 1997 section 152-15,
Income Tax Assessment Act 1997 section 152-35,
Income Tax Assessment Act 1997 section 152-40,
Income Tax Assessment Act 1997 section 152-205 and
Income Tax Assessment Act 1997 subdivision 152-E.