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Edited version of private advice
Authorisation Number: 1051857804993
Date of advice: 26 June 2021
Ruling
Subject: Income tax - CGT - small business concessions
Question
Is the property considered an active asset under section 152-40 of the Income Tax Assessment Act 1997?
Answer
Yes. It is considered that the property was used by a connected entities business for at least half of the ownership period and therefore it is considered an active asset. Additional it is considered that the property was not mainly used to derive rent.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
XX Month 20XX
Relevant facts and circumstances
The Trust purchased a property on XX Month 20XX.
The property was used by a related entity to carry on a small business.
The affiliated business used X% of the property and the remaining X% was rented to non-related parties.
The rental income from the property was approximately X% of the affiliated business income.
The affiliated business was sold on XX Month 20XX.
The final payment date for settlement of the sale of the business was XX Month 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-40