Private ruling: CGT active asset and 15 year exemption
Date of advice: 9 September 2021
Published: November 2021
Ruling period: 30 June 20XX
Date scheme commenced: 1 December 19XX

Ruling: Q1: Does the boarding house qualify as an active asset under section 152-40 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes, the boarding house qualifies as an active asset under section 152-40 of the ITAA 1997. | Q2: If the boarding house is an active asset, can the portion of the proceeds applicable to the boarding house be classed as exempt from capital gains tax (CGT) small business 15 year exemption under Subdivision 152-B of the ITAA 1997? | A2: Yes, the portion of the proceeds from the disposal of the boarding house qualifies for the 15 year CGT exemption under Subdivision 152-B of the ITAA 1997.




Relevant facts and circumstances: You purchased a property in XXX 19XX. | You moved into the property in XXX 19XX where from this time XX% of the property has been used as your private residence and the remainder of the property has been used as a boarding house. | The average length of stay of your boarders is 4 to 6 weeks. | You have a list of house rules that boarders must adhere to. | You provide the following services/facilities to the boarders: | • Cleaning of bathrooms, general maintenance and management services. | • Supervise and control activities. | • Common areas (bathrooms and laundry), studio with self contained kitchen. | You provide linen to the boarders which is washed by you. | You pay all the utility bills. | You retired when you sold and settled the property in XXX 20XX. | You satisfy the maximum net value asset test.