Edited version of private advice

Authorisation Number: 1052032630012

Date of advice: 12 September 2022

Ruling

Subject: Small business CGT concessions - active asset and meaning of active asset

Question

Does the Property satisfy the active asset test pursuant to section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997) and the meaning of active asset pursuant to section 152-40 of the ITAA 1997?

Answer

Yes. You acquired the property in the relevant year as joint tenants, and it has been used in the course of carrying on a business by a connected entity for at least half of the ownership period. Therefore, the Property satisfies the active asset test in section 152-35 of the ITAA 1997 and the meaning of active asset in section 152-40 of the ITAA 1997.

This ruling applies for the following period:

Year ending 30 June 2023

The scheme commences on:

1 July 2022

Relevant facts and circumstances

You purchased a property as joint tenants in the relevant year.

You are a beneficiary of the Family Trust ('the Trust'). You have received more than 40% of the Trust's income in distributions for at least 7 years.

The Trust holds above 40% of ownership in the Company. The Company has been carrying on a business on the Property since its purchase date until now.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 152-35

Income Tax Assessment Act 1997 section 152-40

Income Tax Assessment Act 1997 section 328-125

Further issues for you to consider

This ruling has not considered the basic conditions which must be satisfied in order to apply the small business CGT concessions.