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Edited version of private advice
Authorisation Number: 1051620550115
Date of advice: 18 December 2019
Ruling
Subject: CGT - small business concessions - 15 year exemption
Question
Do you satisfy the conditions to apply the capital gains tax (CGT) small business 15 year exemption to the gain made from the disposal of your business?
Answer
Yes.
In your case, we consider that you satisfy the required conditions to be eligible to apply the CGT small business 15 year exemption. You intend to dispose of your business, which will result in a capital gain. You are a small business entity in the income year and the CGT asset, the business, satisfies the active asset test. You have owned the business for over 15 years and the disposal of the business is in connection with your retirement.
Further information on the CGT small business 15 year exemption can be found on our website, ato.gov.au.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You are a sole trader the business since 19XX.
You are a small business entity.
You are over 55 years old.
You intend to dispose of your business to a newly formed company (New Co).
All shares in New Co will be held by a new family trust with yourself and your spouse as trustees and beneficiaries.
You are undertaking the disposal of the business as part of your retirement.
Relevant legislative provisions
Income Tax Assessment Act 1997 Division 152-B
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 subsection 152-40(1)
Income Tax Assessment Act 1997 section 152-105
Income Tax Assessment Act 1997 subsection 328-130(1)