Private ruling: Capital Gains Tax - Active asset - 15-year exemption
Date of advice: 22 January 2026
Published: 16 March 2026
Ruling period: Year ending 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: Will you satisfy the basic conditions for relief in section 152-10 of the Income Tax Assessment Act 1997 (ITAA 1997) on disposal of the property? | A1: Yes, the basic conditions in subsection 152-10(1) of the ITAA 1997 are satisfied. A capital gains tax (CGT) event will occur when you sell the property, which will result in a capital gain. Immediately before the CGT event, you satisfy the maximum net asset value test under section 152-15 of the ITAA 1997. The active asset test under section 152-35 of the ITAA 1997 is satisfied as the asset was owned for more than 15 years and was used in your business as an active asset for more than 7.5 years during the ownership period. | Q2: Will you satisfy the requirements in section 152-110 of the ITAA 1997 to apply the 15-year exemption with respect to a capital gain you make on the disposal of the property? | A2: Yes, the small business CGT concessions basic conditions have been met, you have owned the property for over 15 years, you will be over 55 at the time of the CGT event, and the CGT event will be in connection with your retirement. Therefore, you satisfy the requirements to apply the small business 15-year exemption to the disposal of the property under section 152-110 of the ITAA 1997.

Relevant facts and circumstances: On DD June 20xx, you purchased, the property. You used the property in your childcare business which you owned and operated working full-time hours as a sole trader. You performed the following duties: • centre manager • administration • payroll • caring of children On DD May 20xx the business was transferred to the company in which you own 100% of the shares. In mid-20xx, you began planning for retirement and consulted your accountants. You intended to sell the childcare centre to fund your retirement. You engaged a real estate agent specialising in childcare business sales. The agent advised selling the business and property separately for a faster sale. The agent recommended offering a X-year lease as per industry norms. A buyer was found within weeks but could not afford both the business and property. On DD August 20xx you sold the business to an unrelated entity third-party childcare operator. You continued working full-time at the centre until DD October 20xx, performing all previous duties with the exception of payroll. From DD September 20xx, you began generating passive rental income under a X-yearlease with the new operator. You retired from full-time work in the same year you sold the business. In the 20xx financial year, you worked for your son's business for one month (40 hours) in an administrative role. In January 20xx, your mother became ill. You travelled 5hrs each way weekly for six months to bring her food and other groceries and to spend time with her and would usually stay for 2-3 days at a time. Your mother passed away on DD July 20xx. You then organised her funeral and prepared her property for sale. On D March 20xx, your mother's property was listed for sale. It sold on DD June 20xx, and the estate was fully administered by DD October 20xx. You are over the age of 55 years old. The property was sold in October 20xx and is due to settle in early 20xx. Your net asset position for the purposes of the maximum net asset value test is less than $6 million. (together with associates and entities connected with you).

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-A | Income Tax Assessment Act 1997 Subdivision 152-B | Income Tax Assessment Act 1997 paragraph 152-105(d)(i)