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Edited version of private advice
Authorisation Number: 1052189649863
Date of advice: 14 November 2023
Ruling
Subject: CGT - small business concession
Question
Are you eligible for the small business Capital Gains Tax (CGT) 15-year exemption under section 152-105 of the Income Tax Assessment Act of 1997 on the disposal of your property?
Answer
Yes. The taxpayer continuously owned the property for more than a 15-year period ending before the CGT event and was permanently incapacitated at the time of the CGT event. You do not carry on a business, but you are an affiliate of a small business who used the property to run their business. The property has been an active asset of yours for the entire time you have owned it.
This ruling applies for the following period:
Year Ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
In 20XX you purchased a property for the sole purpose of your son to run his small business (the business).
There was no rent paid to you.
The business was continuously operated from the property from date of purchase to date of sale.
The business would contribute to your general living expenses, repairs and future development of the property.
There was no formal agreement regarding the arrangement of the business contributing to your living expenses and the property repairs and outgoings.
You were involved as an affiliate and in the development and running of the business, giving your child business instructions on how to develop and run the business. You were also involved in referring customers to the business.
You became permanently incapacitated in June 20XX.
In 20XX the property was sold and the business began to wind up.
You owned the property continuously for more than 15 years.
The business had an aggregate turnover of less than $2 million.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 section 152-105
Income Tax Assessment Act 1997 subdivision 152-B