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Edited version of private advice
Authorisation Number: 1052009951520
Date of advice: 25 July 2022
Ruling
Subject: CGT - small business concessions
Question
Will the sale of the Commercial Property be in connection with your retirement for the purpose of the small business 15-year exemption in section 152-105 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. We consider that the sale of the Commercial Property will be in connection with your retirement for the purposes of the small business 15-year exemption. Having considered the circumstances we accept that subparagraph 152-105(d)(i) of the ITAA 1997 will be satisfied. You will retire upon the sale of the Commercial Property and the proceeds from the sale will be used to fund your retirement.
This ruling applies for the following periods:
Financial year ending 30 June 20XX
Financial year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You acquired the Commercial Property, jointly more than XX years ago.
After acquisition, the Commercial Property was used by an entity connected to you for an extended period of time.
The business ceased several years ago. Since this time, the Commercial Property has been leased to several unrelated parties.
You have managed the Commercial Property which is a multi-tenanted property as well as two other properties which you owned through the management company which you own. Your management activities consisted of inspections, repairs, maintenance, administration and tenancy management related to these properties.
You are in the process of selling the Commercial Property.
You previously sold the other properties you managed. Once the Commercial Property settles you will not manage any other properties and will commence your retirement.
The sale of the Commercial Property is part of your wider plans to fund your continued retirement. Proceeds from the sale will be contributed to your superannuation to the extent allowable. The remaining proceeds retained outside of superannuation will also be used as required to fund your retirement.
You satisfy the basic conditions for relief under section 152-10 of the ITAA 1997 including satisfying the maximum net asset value test under 152-15 of the ITAA 1997
The sale of the Commercial Property is part of your plans to fund your continued retirement. Proceeds from the sale will be contributed to your superannuation to the extent allowable. The remaining proceeds retained outside of superannuation will also be used as required to fund your retirement.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 section 152-15
Income Tax Assessment Act 1997 section 152-105
Income Tax Assessment Act 1997 subparagraph 152-105(d)(i)