Private ruling: Small business concessions
Date of advice: 4 February 2022
Published: April 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does the Property satisfy the active asset test for the purposes of 152-110 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. The Property has been held by you for longer than 15 years and has been an active asset in your business for over 7.5 years. You satisfy the other conditions to apply the 15 year exemption in section 152-110 of the ITAA 1997.

Relevant facts and circumstances: You are a company who operates a business out of a residential property (Property), otherwise occupied by the director and shareholder of the company as a main residence. Your business at the Property has utilised a home office and approximately XX% of the adjacent land for business use since its acquisition over 15 years ago. You have engaged workers who attend at the property daily and you store all company equipment necessary to the business on the Property. The director and shareholder utilised the home office each day to direct the day-to-day operations of the company. The director and shareholder has been the significant individual of the Company for a total of at least 15 years during which you owned the Property. The significant individual is over 55 years old and wish to retire. You will sell the Property in connection with their retirement.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 152-10 | Income Tax Assessment Act 1997 Section 152-35 | Income Tax Assessment Act 1997 Section 152-40 | Income Tax Assessment Act 1997 Section 152-110