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Edited version of private advice
Authorisation Number: 1052068055074
Date of advice: 20 December 2022
Ruling
Subject: Small business concessions - basic conditions
Question
Will you satisfy the basic conditions in Subdivision 152-A of the Income Tax Assessment Act 1997 (ITAA 1997) to be able to apply the small business capital gains tax (CGT) concessions to the disposal of Property?
Answer
Yes. A CGT event will happen when you dispose of the Property and you will make a capital gain on the disposal. Also, you will meet the maximum net asset value test just before the CGT event and, while the Property is currently being used solely to derive rent, the Property satisfies the active asset test as it has been owned for more than 15 years and was an active asset of yours for a total of at least 7 ½ years. Further information about the small business CGT concessions can be found by searching for 'QC 22655' on ato.gov.au
This ruling applies for the following periods:
Year ending 30 June 20YY
Year ending 30 June 20YY
The scheme commences on:
1 July 20YY
Relevant facts and circumstances
You acquired the Property jointly with your spouse.
You have owned the Property for more than 15 years and it has been used in businesses carried on by entities connected with you for more than 7 ½ years.
Since the cessation of the business you have continued to rent the residence on the Property to family members.
The net value of the CGT assets of yours, any entities connected with you, your affiliates or entities connected with your affiliates will not exceed $6million just before the CGT event.
You intend on selling the Property and will make a capital gain from the sale.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 152-A