Private ruling: CGT - small business concessions
Date of advice: 5 October 2022
Published: December 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does the Property satisfy the active asset test pursuant to section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997) and the meaning of active asset pursuant to section 152-40 of the ITAA 1997? | A1: Yes. You acquired the Property in 1985 and it has been used in the course of carrying on a business by you for at least 7.5 years during the ownership period. We do not consider that the exceptions in subsection 152-40(4) of the ITAA 1997 have any application in the circumstances. Therefore, the Property satisfies the active asset test in section 152-35 of the ITAA 1997 and the meaning of active asset in section 152-40 of the ITAA 1997.

Relevant facts and circumstances: You purchased the property (the Property) in November 19XX. You have carried on a business at the Property When the Property was purchased, there were existing tenants occupying X% of the total area of the Property. The tenancy agreement was terminated in 1991. Between January 19XX and June 19XX, you occupied X% of the property In June 19XX you entered into a new lease agreement which was prematurely terminated for a replacement lease in January 19XX. Under this lease agreement the tenant occupied X% of the total Property area. The tenancy agreement ended in January 19XX. During this period you occupied the remainder of the property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-40 Further issues for you to consider | This ruling has not considered the basic conditions which must be satisfied in order to apply the small business CGT concessions. More information is available on our website www.ato.gov.au by searching keywords 'concessions for small business' or Quick Code 'QC 22655'.