Private ruling: CGT small business concessions
Date of advice: 17 May 2022
Published: August 2022
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will Individual A and Individual B satisfy the conditions outlined in subsection 152-10(1A) of the Income Tax Assessment Act 1997 in relation to the transfer of their property interests to Individual C? | A1: Yes. The Commissioner is satisfied that individual C is an affiliate of Individual A and Individual B, and that the small business concessions outlined in subsection 152-10(1A) of the ITAA 1997 have been met.

Relevant facts and circumstances: Individual A currently owns 100% interest in property A. Individual A currently owns 50% interest in property B. Individual B currently owns a 25% interest in property B. Individual C owns the remaining 25% interest in property B. Farming activities have occurred on the properties through various partnerships under the same ABN. The properties have never been considered assets of the partnership. Individual A and individual B have continued to oversee the decision-making and financial operations of the partnership despite no longer being partners. Individual A and Individual B have not carried on any business activities, including as individuals, since they exited the partnership. No market value rent has been charged to the various partnerships in return for use of the properties. No formal agreement is in place to specify the terms of the arrangement for using the properties in the farming operations. The aggregated turnover of the partnership in the prior income year was less than $X million. The anticipated turnover of the partnership in the next income year is expected to be less than $X million. Individual A and Individual B have a succession plan in place with Individual C regarding future business operations and their personal affairs.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 152 | Income Tax Assessment Act 1997 subsection 152-10(1A) | Income Tax Assessment Act 1997 subsection 152-10(1AA) | Income Tax Assessment Act 1997 Paragraph 328-130(1) | Income Tax Assessment Act 1997 section 328-110