| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1052042501460
Date of advice: 6 October 2022
Ruling
Subject: CGT - small business concessions
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 1985 and it has been used in the course of carrying on a business by you for at least 7.5 years during the ownership period. We do not consider that the exceptions in subsection 152-40(4) of the ITAA 1997 have any application in the circumstances. 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 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You purchased the property (the Property) in November 19XX.
You have carried on a business at the Property
When the Property was purchased, there were existing tenants occupying X% of the total area of the Property. The tenancy agreement was terminated in 1991.
Between January 19XX and June 19XX, you occupied X% of the property
In June 19XX you entered into a new lease agreement which was prematurely terminated for a replacement lease in January 19XX. Under this lease agreement the tenant occupied X% of the total Property area. The tenancy agreement ended in January 19XX.
During this period you occupied the remainder of the property.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 section 152-40
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. More information is available on our website www.ato.gov.au by searching keywords 'concessions for small business' or Quick Code 'QC 22655'.