Private ruling: CGT small business concessions
Date of advice: 13 December 2017
Published: May 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Does the farming property meet the criteria of the active asset test contained in section 152 - 35 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. To access the small business capital gains tax (CGT) concessions, an entity must first satisfy the basic conditions in section 152-10 of the ITAA 1997. One of the basic conditions requires the relevant CGT asset to satisfy the active asset test in section 152-35 of the ITAA 1997. This test requires the CGT asset to be an active asset for: ● seven and a half years, if owned for more than 15 years, or ● half of the ownership period if owned for 15 years or less (section 152-35). In your case, you owned the property for a total of X years and operated the farming business yourself for more than seven and half years. Therefore, as the property has been active for more than seven and a half years, you satisfy the conditions of the active asset test.

Relevant facts and circumstances: You purchased a farming business in 199X. You operated the farm for approximately X years. For a period of X years you did not operate the farm, the land was offered to the neighbouring farm for agistment. You recommenced the farming business and operated again for X years when the business and land were sold.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 152-10 and | Income Tax Assessment Act 1997 Section 152-35.