Private ruling: CGT - small business concessions
Date of advice: 23 September 2022
Published: December 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does the property satisfy the active asset test for the purposes of section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. The property satisfies the active asset test in section 152-35 of the ITAA 1997 because you owned the property for less than 15 years, and it was used in the course of carrying on your business for more than half the period of ownership.

Relevant facts and circumstances: You are trading as a sole trader with a registered ABN. You purchased a property in 20XX which was your main residence. You have established a home office and consultation room that occupies XX% of your main residence. This dedicated office area is set up for client consultations. Clients are seen in the consultation room 4 days per week. Your day-to-day operations are conducted in the consultation room. The consultation room entrance is separate from the main entrance of the residence. There is no signage due to client privacy. The property was sold in the 20XX-XX financial year. You were using the dedicated office area to undertake your activities for more than half your period of ownership of the property. You were over 55 at the time the property was sold.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-40