| 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: 1052071279542
Date of advice: 15 December 2022
Ruling
Subject:CGT - small business concessions
Question
Did you satisfy the basic conditions in Subdivision 152-A of the Income Tax Assessment Act 1997 to be able to apply the small business capital gains tax (CGT) concessions to the capital gain you made on the early termination of the lease?
Answer
Yes. A CGT event happened when the lease was terminated, and you satisfied the maximum net asset value test just before the CGT event. Also, the lease, being an intangible asset that was inherently connected with your farming operation, satisfied the active asset test.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You operated a farming business in partnership.
You entered a lease of farming land that you used in your farming business.
You entered a deed to vary the lease to facilitate (amongst other things) an early termination of the lease so that the farmland could be sold as a going concern.
The farm owner executed a sales contract to dispose of the land, and in accordance with the deed, the lease was terminated early, and you received a lump sum payment and made a capital gain.
The net value of the CGT assets of yours, any entities connected with you, your affiliates or entities connected with your affiliates did not exceed $6million just before the CGT event.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 152-A