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Edited version of private advice
Authorisation Number: 1051924259904
Date of advice: 25 November 2021
Ruling
Subject: Small Business CGT concessions - Active Asset
Question
Does the Property satisfy the active asset test under section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. The Property was owned by Company A for over 15 years, during which time the Property was used or held ready for the use in the course of carrying on a business by a connected entity for over 7.5 years. On this basis the Property satisfies the active asset test under section 152-35 of the ITAA 1997.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 2020
Relevant facts and circumstances
Company A was incorporated on XX/XX/19XX. Company B was incorporated on XX/XX/19XX. The sole director and shareholder of both Company A and Company B was X.
From its incorporation, Company B operated a business.
On XX/XX/19XX, Company A acquired a Property. The Company held the Property for over 15 years.
While Company A rented the Property out for various periods during its ownership period. When the Property was not tenanted, Company B used the Property in its business. The period in which Company B used the Property in its business was over 7.5 years.
Company A sold the Property on XX/XX/20XX.
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 328-125