Private ruling: small business 15-year exemption
Date of advice: 7 April 2020
Published: May 2020
Ruling period: Year ending 30 June 2020
Date scheme commenced: 1 July 2019

Ruling: Q1: Are you entitled to the capital gains tax (CGT) small business 15-year exemption on the sale of your property? | A1: Yes. You satisfy the basic conditions for the small business concessions under section 152-10 of the Income Tax Assessment Act 1997 (ITAA 1997) upon the sale of the property as: · Company Z, which is a small business entity, is connected with you as you own equity interests in the company that gives you at least 40% of the voting power in the company (paragraph 328-125(2)(b) of the ITAA 1997); · Your property is used by the company in carrying on its business (subsection 152-10(1A) of the ITAA 1997); and · Your property passes the active asset test as it has been used by the company in carrying on its business for more than 7.5 years (sections 152-35 and 152-40 of the ITAA 1997). You satisfy the additional requirements under section 152-105 of the ITAA 1997 to access the small business 15-year exemption as: · You will have continuously owned the property for the 15-year period prior to the sale; · You are over 55 years old; and · The sale of your property will happen in connection with your retirement.


Relevant legislative provisions: Income Tax Assessment Act 1997 - section 152-10 | Income Tax Assessment Act 1997 - subsection 152-10(1A) | Income Tax Assessment Act 1997 -section 152-35 | Income Tax Assessment Act 1997 -section 152-40 | Income Tax Assessment Act 1997 - section 152-105 | Income Tax Assessment Act 1997 - paragraph 328-125(2)(b)


You have owned the property for more than 15 years. | The property has been used for a business for the entire time. | Company Z (the company) runs the business. | The company is a small business entity as its aggregated turnover is less than $2 million. | You and your spouse have x A class share each. You both acquired your shares more than 15 years ago. | Your relations each have xxx B class shares. These shares were acquired more than 15 years ago. | The A class shares are equity and governing shares. | The B class shares are dividend only shares. | You and your spouse each have 50% of the voting power in the company and are each entitled to 50% of the capital. | You, your spouse and relations are directors in the company. | The company will be selling the business to your relations' new company. | You wish to sell the property to your relations at the same time the company sells the business. | You are not a small business entity. | You do not pass the maximum net asset value test. | After selling the property you will stop work.