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Edited version of private advice
Authorisation Number: 1052037860358
Date of advice: 27 September 2022
Ruling
Subject: CGT - small business concessions
Question 1
Can the Deceased apply the small business 15-year exemption under section 152-105 of the Income Tax Assessment Act 1997 (ITAA 1997) to disregard the capital gain made on the disposal of property interest 1 (original 50%)?
Answer
Yes.
The Deceased satisfied the basic conditions to access the small business concessions and also met the additional conditions to access the 15-year exemption. The Commissioner also considered that the sale of the property was in connection with the retirement of a significant individual.
Question 2
Can the Deceased apply the small business 15-year exemption under section 152-105 of the ITAA 1997 to disregard the capital gain made on the disposal of property interest 2 (inherited 50%)?
Answer
Yes.
The partner of the Deceased satisfied the basic conditions to access the small business concessions and met the additional conditions to access the 15-year exemption, before their death. The Commissioner also considered that the property transferred to the Deceased due to being joint tenants and interest 2 would have been eligible for the 15-year exemption.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The Deceased and their late partner purchased land after 20 September 1985, as joint tenants.
As a partnership, they operated a primary production business from the property.
The partner passed away aged over 55.
The Deceased continued to operate the property as a primary production business on the property until it was sold.
The Deceased operated a small business entity with an aggregate turnover of less than $X Million.
The asset was held and used in the course of carrying on a business.
The asset had been an active asset of the business for the whole ownership period.
The property was put up for sale and the contract of sale was during the year ended 30 June 20XX.
Settlement occurred in the year ended 30 June 20XX.
The sale of the property was in connection with the retirement of the Deceased.
The Deceased subsequently passed away in the year ended 30 June 20XX, aged over 55.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 section 152-80
Income Tax Assessment Act 1997 section 152-110
Income Tax Assessment Act 1997 section 152-215