Private ruling: Small business concessions
Date of advice: 18 June 2020
Published: August 2020
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does the partnership satisfy the basic conditions under subdivision 152-C of the Income Tax Assessment Act 1997 (ITAA 1997) to apply the 50% active asset reduction to the capital gain made on the sale of the property? | A1: Yes. Applying the same principles in Taxation Ruling TR 2019/1 I ncome tax: when does a company carry on a business ,the partnership is considered to carry on a business. As the partnership has an aggregated turnover of less than $XXX in the income year in which the capital gains tax (CGT) event occurred, it is a CGT small business entity in that income year. The property has been owned by the partnership for more than XX years and used in the partnership's business for more than XX of those years, therefore the property satisfies the active asset test. Accordingly, the partnership has met the basic conditions to apply the 50% active asset reduction small business CGT concession. For more information please see QC 52289 on ato.gov.au.

Relevant facts and circumstances: The partnership is a family partnership. In XXXX, the partners purchased a property. The partners lived at the property. The partnership operates cattle farming and agistment on the land of the property to derive income. The partnership has lodged family partnership income tax returns with the Australian Taxation Office (ATO) since 1 July XXXX. The income for the partnership is less than $XXX dollars per year The land has been used in the partnership's business for more than XX years. The property was sold and ownership ended creating a capital gain.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 subsection 152-35 | Income Tax Assessment Act 1997 subdivision 152-C