Private ruling: Small business - capital gains concessions
Date of advice: 15 August 2023
Published: 3 October 2023
Ruling period: Income year ending 30 June 2024 | Income year ending 30 June 2025 | Income year ending 30 June 2026
Date scheme commenced: 1 July 2023

Ruling: Q1: Does section 152-105 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to disregard the capital gain arising from the disposal of the farm? | A1: Yes. You are a small business entity. You have owned and operated your farm for over 15 years. You are over 55 years old, and the sale of the farm is in connection with your retirement. As such, you can disregard the capital gain from the disposal of the farm.

Relevant facts and circumstances: You purchased a farm and commenced a sole trader activity of cattle grazing and fattening. You operate the farm part time while remaining in full-time employment elsewhere. You have operated the farm for over 15 years. You are planning on selling the farm within 3 years. Upon the sale of the farm, you will retire from farming but remaining in full-time employment. You are planning on retiring from your full-time employment in 5 to 6 years. You are a small business entity. Your aggregated turnover is less than $2m. The farm is an active asset. You are over 55 years old.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-105