Private ruling: Small business 15 year exemption
Date of advice: 19 January 2022
Published: April 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the capital gain made in relation to the sale of your 50% post-capital gains tax (CGT) interest in the Property be exempt from CGT under the small business 15 year exemption in subdivision 152-B of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. You have met the basic conditions in subdivision 152-A of the ITAA 1997. You owned the post-CGT interest for more than 15 years before its sale.You conducted a business on the Property from XX/XX/XXXX and the Property was an active asset for longer than the requisite 7.5 years. You have now ceased business activities on the Property and sold the Property in connection with your retirement. Therefore, the capital gain made on the disposal of your 50% post-CGT interest in the Property is exempt from CGT under the small business 15 year exemption.

Relevant facts and circumstances: Your family operated a business on the Property. They subsequently transferred to you a pre-CGT interest and a post-CGT interest in the Property. Upon the transfer of the post-CGT interest, you carried on a business in your own right on the Property from XX/XX/XXXX. From XX/XX/XXXX you began to wind down your business activities on the Property. The Property was sold on XX/XX/XXXX in relation to your retirement. You meet the basic conditions in Subdivision 152-A of the ITAA 1997 in relation to the sale of the post-CGT interest you held in the Property. At the time of the CGT event, you were over 55 years of age.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-A | Income Tax Assessment Act 1997 Section 152-35 | Income Tax Assessment Act 1997 Section 152-40 | Income Tax Assessment Act 1997 Section 152-105 | Income Tax Assessment Act 1997 Section 328-110