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Edited version of private advice
Authorisation Number: 1051933161784
Date of advice: 13 December 2021
Ruling
Subject: Small business 15 year exemption
Question
Will the capital gain made in relation to the sale of your 50% post-capital gains tax (CGT) interest in the Property be exempt from CGT under the small business 15 year exemption in subdivision 152-B of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. You have met the basic conditions in subdivision 152-A of the ITAA 1997. You owned the post-CGT interest in the Property for approximately XX years.You conducted a primary production business on the Property from XX/XX/XXXX, and the Property was an active asset for longer than the requisite 7.5 years. You have now ceased your primary production activities and sold the Property in connection with your retirement. Therefore, the capital gain made on the disposal of your 50% post-CGT interest in the Property is exempt from CGT under the small business 15 year exemption.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You and your late spouse carried on a primary production business on a Property which was acquired as tenants in common in equal shares pre-20 September 1985.
Upon your spouse's death post-20 September 1985, their interest in the Property passed to you.
You have continued to carry on a primary production business on the Property.
Due to health concerns, you decided to cease primary production activities on the Property and facilitate the sale of the Property. The sale of the Property was in relation to your retirement.
The Property was sold on XX/XX/XXXX. You disposed of the 50% pre-CGT interest you held in the Property since pre-CGT and a post-CGT interest inherited by you after your spouse's death.
You meet the basic conditions in Subdivision 152-A of the ITAA 1997 in relation to the sale of the post-CGT interest held in the Property.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 152-A
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 section 152-40
Income Tax Assessment Act 1997 section 152-105
Income Tax Assessment Act 1997 section 328-130