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Edited version of private advice
Authorisation Number: 1052319033235
Date of advice: 5 November 2024
Ruling
Subject: CGT - 15-year exemption
Question
Is the CGT event in relation to the sale of your business in connection with your retirement for the purposes of paragraph 152-105(d)(i) of the Income Tax Assessment Act 1997?
Answer
Yes, the CGT event in relation to the sale of your business is in connection with your retirement.
This ruling applies for the following period:
1 July 2024 until 30 June 2025
The scheme commenced on:
1 July 2024
Relevant facts and circumstances
You are 55 years of age and will retire on 30 June 20XX.
You are the founder of your business and a sole proprietor. You have carried on this business since 20XX.
You will sell your business to another party (the Buyer). In order to lock in your retirement plan, you will execute an agreement for the sale of your business in the year ending 30 June 2025. This will provide certainty to the Buyer that the sale will go ahead. The settlement of the sale will take place on 30 June 20XX and the Buyer will take over your business on the same day.
Goodwill is the main asset of your business. You will make a capital gain on the sale of the goodwill.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 subsection 108-5(2)
Income Tax Assessment Act 1997 section 152-105