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Edited version of private advice
Authorisation Number: 1052231073959
Date of advice: 13 March 2024
Ruling
Subject: CGT - 15 year exemption
Question
Are you entitled to disregard the capital gain made on the disposal of the property under the 15-year exemption?
Answer
No.
This ruling applies for the following period:
Year ending 30 June 20YY
Year ending 30 June 20YY
Year ending 30 June 20YY
Year ending 30 June 20YY
The scheme commenced on:
1 January 20YY
Relevant facts and circumstances
A property was originally purchased by the company prior to 20 September 19YY.
You inherited X shares in the company in 19YY. At this time you were a Y% shareholder in the company.
You inherited a further X shares in 20YY. At this time you were a Y% shareholder in the company.
You acquired a final X shares in 20YY giving you a Y% shareholding in the company.
Other shareholders of the company were various family members.
The property was transferred to you in the 20YY-YY financial year prior to the company being deregistered. Other property held by the company at that time was sold or transferred to other family members.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-105
Reasons for decision
15-year exemption
Section 152-105 of the ITAA 1997 provides a small business 15-year exemption for an individual. Under this section, you can disregard the capital gain from the disposal of a CGT asset if:
(a) you satisfied the basic conditions in Subdivision 152-A of the ITAA 1997 for the gain
(b) you continuously owned the CGT asset for the 15-year period ending just before the CGT event happened
(c) if the CGT asset is a share in a company or an interest in a trust - the company or trust had a significant individual for a total of at least 15 years during which you owned the CGT asset
(d) either:
i. you are 55 or over at the time of the CGT event and the event happened in connection with your retirement; or
ii. you are permanently incapacitated at the time of the CGT event.
Application to your circumstances
In this case, you acquired the XXXX property in the 20YY-YY financial year when the company was liquidated. Therefore, you have not continuously owned the asset for a 15-year period and do not satisfy the conditions set out in section 152-105 of the ITAA 1997.