Private ruling: CGT - disposal of shares
Date of advice: 4 July 2025
Published: 1 September 2025
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you eligible for the CGT small business retirement exemption under section 152-305 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. You are eligible for the CGT small business retirement exemption and can disregard part, or all, of the capital gain made on the sale of the property up to a lifetime limit of $500,000. You satisfy the basic conditions under section 152-10 of the ITAA 1997 because: • A CGT event will occur and a gain will be made when you dispose of your shares in Company A. • You satisfy the maximum net asset value test. • Your shares in Company A satisfy the active asset test as you have held the shares in Company A and carried on a business since its inception and more than 80% of Company A's assets at the time of the financial statements are active assets. • You satisfy the additional basic conditions for shares in a company as you are a CGT concession stakeholder of Company A. • You are not eligible for the 15 year exemption. • You will be over 55 years old at the time of the CGT event and intend to retire permanently.

Relevant facts and circumstances: You own shares in Company A. You provided us with details on your share percentage along with the acquisition date. You provided us with details on how many shares you acquired and the value of the shares at acquisition date. You are joint director of Company A since share acquisition date. There has been no change in your shareholding in Company A since the shares were acquired. You are an employee of Company A. Company A runs a business and you provided us with details about their business. You provided us with balance sheet for Company A for the year ended 30 June 20XX, which showed their assets. You intend to fully retire by a specified date and you have no intention of working after retirement. You will sell all your shares in Company A to the remaining shareholders. You provided us with details on the amount that you will sell them for. You will enter into a contract for the sale of the shares on a specified date. As per ASIC regulations, Company A has provided ASIC with 2 weeks' notice of the intention for you to sell your shares. After the agreement has been signed, you are expected to receive payment in full for the sale of shares shortly after. You will be 55 years or older at the time of the CGT event. The total net value of CGT assets owned by you, entities connected with you, your affiliates and entities connected with your affiliates, does not exceed $6 million. Assumption Company A's active asset will continue to be more than 80% of its total asset immediately before the CGT event.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 subsection 152-10(1) | Income Tax Assessment Act 1997 subsection 152-10(1A) | Income Tax Assessment Act 1997 subsection 152-10(1B) | Income Tax Assessment Act 1997 paragraph 152-10(1)(d) | Income Tax Assessment Act 1997 subparagraph 152-10(2)(d)(i) | Income Tax Assessment Act 1997 subsection 152-10(2) | Income Tax Assessment Act 1997 paragraph 152-10(2)(a) | Income Tax Assessment Act 1997 subparagraph 152-10(2)(c)(ii) | Income Tax Assessment Act 1997 section 152-15 | Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 subsection 152-35(1) | Income Tax Assessment Act 1997 subsection 152-35(2) | Income Tax Assessment Act 1997 subsection 152-40(3) | Income Tax Assessment Act 1997 section 152-55 | Income Tax Assessment Act 1997 section 152-60 | Income Tax Assessment Act 1997 section 152-305 | Income Tax Assessment Act 1997 section 328-125 | Income Tax Assessment Act 1997 subsection 328-125(1) | Income Tax Assessment Act 1997 subsection 328-125(2)