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Edited version of private advice
Authorisation Number: 1051616082697
Date of advice: 13 December 2019
Ruling
Subject: Small Business CGT Concessions
Question
Can you disregard the capital gain made on the disposal of property one under the small business 15 year exemption?
Answer
Yes. You won't have an assessable gain 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 periods:
Year ended 30 June 2019
Year ending 30 June 2020
The scheme commences on:
01 July 1999
Relevant facts and circumstances
The significant individual is the sole shareholder / director of the following corporate entities:
· Company one: and
· Company two.
Company two operated a business
Company one purchased a property.
The significant individual purchased another property (property two)
Property two was acquired for direct secure access to the property one and to support the business.
In the significant individual's personal capacity and under company one, the significant individual leased property one and property two to company two on a commercial basis.
Property one and property two were leased from the time of acquisition and until their disposal.
Company one has used property one and property two to conduct the business of company two
Property one and property two have never been used for any other purpose then to operate the business.
Property one and property two are active assets.
There has never been any private use of the property one or property two; they are exclusively used for the business operation of company two.
The turnover of company one for the test year was less than $2 million.
Property one was disposed of and a capital gain was made.
Property two was disposed of and a capital gain was made.
The significant individual is over 55 at the time of the CGT event and intends to retire.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 152-10
Income Tax Assessment Act 1997 Section 152-10(2)
Income Tax Assessment Act 1997 Section 152-10(1)(c)(i)
Income Tax Assessment Act 1997 Section 152-35(1)
Income Tax Assessment Act 1997 Section 152-40
Income Tax Assessment Act 1997 Section 152(c)
Income Tax Assessment Act 1997 Section 328-110(1)