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 qualify for the Small Business 15-year exemption in relation to the capital gain arising from the disposal of the Water Access Licence (WAL)? | A1: Yes, you can disregard the capital gain on the disposal of the WAL using the 15-year exemption as you meet the basic conditions, the asset was an active asset, you owned the asset for more than 15 years, the significant individual was over 55 and the sale was in connection with their retirement. | Q2: Do you qualify for the Small Business 15-year exemption in relation to the capital gain arising from the disposal of the property? | A2: Yes, you can disregard the capital gain on the disposal of the property using the 15-year exemption as you meet the basic conditions, the asset was an active asset, you owned the asset for more than 15 years, the significant individual was over 55 and the sale was in connection with their retirement. | Q3: Do you satisfy the conditions under subsection 152-125(1) of the Income Tax Assessment Act 1997 to make an exempt payment to the Shareholder equal to the capital gain arising from the disposal of the property and the WAL? | A3: Yes, you satisfy the conditions to make an exempt payment as the capital gains arising from the sale of the WAL and the property are disregarded under the 15-year exemption by the company, the shareholder is a CGT concession stakeholder, and you will make the payment within 2 years of the CGT event.

Relevant facts and circumstances: You are a proprietary limited company and a tax resident of Australia. You do not carry on a business activity. Person A holds 100% of the shares. Person A is the ultimate controller of you. You acquired a property more than 15 years ago. You entered a contract to sell the property in the year ended 30 June 20XX. You made a capital gain on the sale. A Water Access Licence (WAL) was issued in relation to the property. The WAL was originally issued before 19 September 1985 with the title originally issued in Person A's name. The WAL title registration was subsequently corrected with title transferred to you more than 15 years ago. You entered a contract to sell the WAL in the year ended 30 June 20XX. You made a capital gain on the sale. Person A is a partner of a general law partnership. For more than 15 years the property and the WAL have been used by the partnership to carry on its primary production business. The partnership pays your outgoings and expenses for the property and the WAL. These payments are substitutes for lease payments and for the use of those assets in the business. The aggregated turnover of the partnership was less than $2 million for the year ended 30 June 20XX. Person A is above the age of 55 and planned to transition to retirement during the year ended 30 June 20XX, in connection with the sale of the property and WAL. Person A is the significant individual of the company. Person A's retirement plans include a significant reduction of hours and exertion from their current full-time activities to 10-15 hours per week. After the disposals, the partnership will operate a small-scale, cattle grazing operation on the remaining real property available to the partnership in retirement. You will make a payment to Person A, the CGT concession stakeholder within 2 years of the CGT events.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 100-45 | Income Tax Assessment Act 1997 subsection 104-10(5) | Income Tax Assessment Act 1997 subsection 152-10(1) | Income Tax Assessment Act 1997 subsection 152-10(1A) | Income Tax Assessment Act 1997 subsection 152-10(1AA) | Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-40 | Income Tax Assessment Act 1997 section 152-50 | Income Tax Assessment Act 1997 section 152-55 | Income Tax Assessment Act 1997 section 152-60 | Income Tax Assessment Act 1997 section 152-65 | Income Tax Assessment Act 1997 section 152-70 | Income Tax Assessment Act 1997 section 152-75 | Income Tax Assessment Act 1997 section 152-110 | Income Tax Assessment Act 1997 section 152-125 | Income Tax Assessment Act 1997 section 328-110 | Income Tax Assessment Act 1997 section 328-125 | Income Tax Assessment Act 1997 section 328-130