Private ruling: CGT - 15-year exemption
Date of advice: 9 April 2025
Published: 16 June 2025
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will you be able to apply the small business 15-year exemption in Subdivision 152-B of the Income Tax Assessment Act 1997 (ITAA 1997) to disregard the capital gain you make on the disposal of the Property? | A1: Yes.

Relevant facts and circumstances: You acquired Lot A more than 15 years ago. You acquired Lot B some time later but more than 15 years ago. Together the lots are known as the Property. You have used the Property in a sole trader primary production business since acquisition. You have also been employed full-time for the past XX years. You have entered into an employment contract with your employer ending on DDMMYYYY. You are not working for your employer during this period; rather, you will be receiving annual and long service leave payments. You will place the Property on the market in the year ending 30 June 20XX. You will make a capital gain from the disposal of the Property. You will cease your primary production business when you sell the Property. You do not have any plans to materially engage in employment or business after the Property is sold. You are over the age of 55. Your aggregated turnover, including any affiliates and connected entities, will be less than $2million in the income year the Property is sold.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-A | Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 section 152-105 | Income Tax Assessment Act 1997 paragraph 152-105(d)(i)

Reasons for decision: Summary: You can apply the small business 15-year exemption to disregard the capital gain you will make on the disposal of the Property. | Detailed Reasoning - Detailed reasoning: Section 152-105 of the ITAA 1997 provides a small business 15-year exemption for individuals. Under this section, you can disregard the capital gain you make on the disposal of a capital gains tax (CGT) asset if you: (a) satisfy the basic conditions for the small business CGT concessions in Subdivision 152-A of the ITAA 1997 (b) continuously owned the CGT asset for the 15-year period ending just before the CGT event, and (c) are at least 55 years old at the time of the CGT event and the event happens in connection with your retirement, or are permanently incapacitated at that time. In your case, the basic conditions contained in Subdivision 152-A of the ITAA 1997 will be satisfied because: • a CGT event will occur when you dispose of the Property • the event will result in a gain • you will be a CGT small business entity at the time of the event, and • you will have owned the Property for more than 15 years and the Property will have been used in your primary production business for a total of at least 7½ years of your ownership period. In addition, • you will have continuously owned the property for the 15-year period ending just before the CGT event • you will be at least 55 years old when you dispose of the Property, and • the disposal will happen in connection with your retirement.