Private ruling: Small business CGT concessions 15-year exemption
Date of advice: 16 December 2025
Published: 9 February 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Do you satisfy the basic conditions under subsection 152-10(1) of the Income Tax Assessment Act 1997 in relation to the disposal of properties A, B and C and the Water Access Licence? | A1: Yes. You satisfy the basic conditions for the small business concessions in accordance with section 152-10 of the ITAA 1997 as the assets are active assets, their sale has resulted in a capital gain, you are a partner in a partnership, that is a small business entity, and the assets are used in that business. | Q2: Do you qualify for the small business 15-year exemption in relation to the capital gains arising from the sale of the CGT assets, property A and B? | A2: Yes. You are eligible to use the 15-year exemption to disregard the capital gains arising from the sale of Property A and Property B, as you satisfy the basic conditions, are over 55 years old, you have owned the active assets for more than 15 years and the CGT event has happened in connection with your retirement.

Relevant facts and circumstances: You and your spouse owned several rural properties as joint tenants. • Property A since the year ended 30 June XXXX. • Property B since the year ended 30 June XXXX. • Property C since the year ended 30 June XXXX. You and your spouse entered contracts to sell the 3 properties during the year ended 30 June 20XX. In the year ended 30 June XXXX, you and your spouse entered into a contract and settled to acquire a water entitlement in relation to property B. In the year ended 30 June XXXX, this entitlement was converted to a water access licence (WAL). In the year ended 30 June XXXX, you and your spouse acquired and settled an additional water entitlement. The additional entitlement was assigned to the same WAL from the year ended 30 June XXXX. In the year ended 30 June XXXX, you and your spouse acquired and settled a contract to acquire a further WAL for property B. The WAL allows the access licence holder to extract water. The water is used or held available for use by the holder to irrigate fields to grow crops. In the year ended 30 June 20XX you and your spouse entered a contract to sell the WALs. You have made a capital gain for each of the above-mentioned CGT assets. You are a partner of the general law partnership. The partners of the Partnership consist of you, your spouse and a family trust. You and your spouse each held a 25% share of the partnership. The family trust held the remaining 50% share of the partnership. The partnership carried on the business activity of primary production. The partnership has used or held ready for use the properties and the WAL to carry on its business from when each of the assets were acquired. The partnership pays rent for the use of properties A, B and C and the WAL. The aggregated turnover of the Partnership was less than $2 million for the year ending 30 June 20XX. You are over the age of 55 and you planned to retire, coinciding with the sale of the properties. With the disposal of most of the farming properties, your retirement plans include a significant reduction of hours and exertion from the current full-time activities. After the disposals, the business will operate small-scale operations on the remaining real property available to the partnership.

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 152-105 | Income Tax Assessment Act 1997 section 328-110