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Edited version of private advice
Authorisation Number: 1052411258938
Date of advice: 20 June 2025
Ruling
Subject: CGT - 15-year exemption
Question 1
Is the Trustee for A's Estate eligible for the capital gains tax (CGT) small business 15-year exemption under Subdivision 152-B of the Income Tax Assessment Act 1997 to disregard the capital gain arising from the sale of the Farmland?
Answer 1
Yes. The Trustee for A's Estate is eligible for the CGT small business 15-year exemption under Subdivision 152-B of the Income Tax Assessment Act 1997 as all relevant conditions have been satisfied.
This ruling applies for the following period:
1 July 20XX to 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
1. A acquired the Farmland in 20XX for $XXX,XXX. A was the sole owner of the Farmland.
2. Since acquiring the Farmland, A had operated a primary production business through a partnership, consisting of A and B.
3. In 20XX, A had to decrease the scale of the business due to age and declining health.
4. In 20XX, A leased a portion of the Farmland and share farmed the remainder.
5. The partnership dissolved on 30 June 20XX and A continued the enterprise as a sole trader.
6. Approximately XX% of the Farmland was leased.
7. Approximately XX% of the Farmland was used for A's farming business.
8. A received all income derived from their farming business. A contractor working on the farmland was being paid a contract fee by A for the operations performed.
9. A attended the farm regularly and monitored the performance of the farm. A made all decisions regarding the optional operations of the farm.
10. A passed away in 20XX at the age of over 55 years.
11. A had no connected entities or affiliates before their death.
12. A continued their farming business until the date of their death.
13. The Farmland had been held by A exclusively for more than 15 years.
14. The 20XX/20XX financial report for A as the sole trader shows an aggregated turnover (including income from the farming business and lease income) of less than $XX.
15. Upon A's death, the Farmland became an asset of A's Estate and is held on trust by their legal representative during the administration of the Estate.
16. The Farmland was sold from A's Estate in 20XX for $X,XXX,XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 108-5
Income Tax Assessment Act 1997 Division 152
Income Tax Assessment Act 1997 Subdivision 152-A
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 Subdivision 152-B
Income Tax Assessment Act 1997 section 152-80
Income Tax Assessment Act 1997 section 152-105