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Edited version of private advice
Authorisation Number: 1051642895760
Date of advice: 6 March 2020
Ruling
Subject: Small business CGT concessions - affiliate of a connected entity
Question
Do you satisfy the basic conditions to apply the small business capital gains tax (CGT) concessions upon the disposal of your ownership share of a commercial property?
Answer
Yes
You are considered an affiliate of your spouse who held equal shares and voting rights in the business being operated on the property and therefore you are entitled to access the small business concessions upon the sale of the property.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You own a commercial property with your spouse and another relative in equal shares.
The property was built from land bought in the early 20XX's and the construction was completed two years later.
A partnership between the owners of the property was established and registered for GST.
The property is fully tenanted and is being leased by your spouse's and child's company and part of it sub-leased to the trustee of the family trust.
The company is a small business entity with a turnover of less than $XXX.
Your spouse and child are the ordinary shareholders of the company with rights to voting, income and capital.
The property has been leased to the company for the majority of the total 15 years of the ownership period of the land.
The property is used mainly for business purposes with less than 10% of the income derived from rent.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 subsection 152-47(2)