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Edited version of private advice
Authorisation Number: 1051719765415
Date of advice: 23 July 2020
Ruling
Subject: Small business concessions - 15-year exemption
Question
Do you satisfy the conditions to apply the capital gains tax (CGT) small business 15-year exemption in section 152-105 of the Income Tax Assessment Act 1997 to the gain made from the sale of the land?
Answer
Yes.
In your case, we consider that you satisfy the conditions to apply the small business 15-year exemption to the sale of the land. You were a small business entity in the income year in which the CGT event occurred and the land satisfies the active asset test. You owned the land for over 15 years and the disposal of the property was in connection with your retirement. The capital gain upon the sale of the land is therefore disregarded.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You were the owner of post-CGT land for a continuous period of more than 15 years. The land was used in your primary production business for your whole ownership period.
You never had an aggregated turnover for an income year of $2M or more.
You were over the age of 55 when you disposed of the land and shortly afterwards you transitioned into retirement.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 section 152-40
Income Tax Assessment Act 1997 section 152-105