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Edited version of private advice
Authorisation Number: 1051921561454
Date of advice: 12 November 2021
Ruling
Subject: CGT - 15 years exemption
Question
Does Company A meet the conditions under Subdivision 152-A and 152-B of the Income Tax Assessment Act 1997 (ITAA 1997)to apply the 15-year exemption and disregard the capital gain made on disposal of the property?
Answer
Yes. Having considered your circumstances and the relevant facts, Company A will satisfy the basic conditions for the small business CGT concessions under Subdivision 152-A of the ITAA 1997 upon disposal of the asset. Further, Company A has continuously owned the asset for over 15 years, has had a significant individual for at least 15 years who is over 55 years of age and the Commissioner considers that the disposal of the asset will be in connection with the retirement of the significant individual. Therefore, Company A can apply the 15-year exemption under Subdivision 152B of the ITAA 1997 upon disposal of the asset.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
In 19XX, Company A purchased a property (the asset).
Company A has two directors who are over 55 years of age and plan to retire.
The directors are Individual A and Individual B. Individual A and Individual B are spouses.
Company A has X shares, with Individual A holding X shares and Individual B holding X shares.
The net assets of Company A and their affiliates/connected entities was less than $6 million for the relevant year.
Individual A is the significant individual of Company A.
From acquisition to 20XX, Company A rented out the asset to Company B.
Individual A and Individual B are the directors of Company B and own 100% of the shares.
Company B conducted a business from the asset for over 15 years.
Since 20XX, Company A have rented out the asset to an unrelated party.
The asset will be sold in the 20XX-XX financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 152-A
Income Tax Assessment Act 1997 Subdivision 152-B
Income Tax Assessment Act 1997 Section 152-10
Income Tax Assessment Act 1997 Section 152-35
Income Tax Assessment Act 1997 Section 152-55
Income Tax Assessment Act 1997 Section 152-105