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Edited version of private advice
Authorisation Number: 1052210410752
Date of advice: 12 January 2024
Ruling
Subject: CGT - small business concessions
Question
Did the disposal of the property happen in connection with the retirement of Individual A for the purposes of Subdivision 152-B of the Income Tax Assessment Act 1997?
Answer
Yes. It is accepted that the disposal of the property was integral to Individual A's retirement plan, and that the reason for the delay in selling the property was due to the requirement to lease the property to the purchaser of the business. In addition, there is a demonstrated pattern of Individual A winding down their involvement in the business and overall working hours. As such, it is considered that the disposal of the property happened in connection with Individual A's retirement.
This ruling applies for the following period:
Year ended 30 June 20YY
The scheme commenced on:
1 July 2023
Relevant facts and circumstances
You acquired a property in 20XX.
The property was used in a business carried on by a connected entity from 20XX to 20XX.
Individual A and their late spouse worked full time in the business for that period.
You always had at least one significant individual for the whole ownership period.
The connected entity sold its business in the year ended 30 June 20XX.
The property was leased to the buyer as part of the deal to sell the business.
After the sale of the business Individual A provided occasional advice on the business operation but did not receive any payments as a reward for the advice.
Individual A did not have any other occupations during this period.
A sales agent was engaged in 20XX and a contract of sale was signed in 20XX.
Individual A was over 55 years of age at the time of the disposal of the property and will receive all the income and capital distributions from you in the year of sale.
Individual A has now transitioned fully into retirement having ceased providing advice for the business and reduced their working hours to nil.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 152-B
Income Tax Assessment Act 1997 paragraph 152-110(1)(d)