Private ruling: Small Business CGT concessions - Active Asset
Date of advice: 25 November 2021
Published: February 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 2020

Ruling: Q1: Does the Property satisfy the active asset test under section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. The Property was owned by Company A for over 15 years, during which time the Property was used or held ready for the use in the course of carrying on a business by a connected entity for over 7.5 years. On this basis the Property satisfies the active asset test under section 152-35 of the ITAA 1997.

Relevant facts and circumstances: Company A was incorporated on XX/XX/19XX. Company B was incorporated on XX/XX/19XX. The sole director and shareholder of both Company A and Company B was X. From its incorporation, Company B operated a business. On XX/XX/19XX, Company A acquired a Property. The Company held the Property for over 15 years. While Company A rented the Property out for various periods during its ownership period. When the Property was not tenanted, Company B used the Property in its business. The period in which Company B used the Property in its business was over 7.5 years. Company A sold the Property on XX/XX/20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-40 | Income Tax Assessment Act 1997 section 328-125