Private ruling: CGT – small business concessions - in connection with retirement
Date of advice: 13 May 2019
Published: June 2019
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Is the sale of the properties considered to be in connection with X and Y’s retirement? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner considers that the sale of the asset is in connection with your retirement. Further information on the factors included in connection with retirement can be found by searching ‘QC 44192’ on ato.gov.au .

Relevant facts and circumstances: X, Y and their children operate a cattle grazing enterprise. The enterprise is conducted through a family. X, Y and their children are all beneficiaries of the trust. X is the sole appointer. The trustee is a company incorporated in Australia. X and Y are directors of the company. Until the 2017/18 financial year the enterprise was operated on four rural properties. X primarily ran the enterprise and employed one full time worker to help manage the properties. Y was in charge of all of the administration duties for the enterprise. Property one was owned solely by X. Property two and three were owned by X and Y. Property four was owned by X and their children. In the 2017/18 financial year X and Y sold the properties. The family, including X and Y, have since purchased new land for the trust to run its primary production enterprise. The new property is smaller in size than the original properties. The trust will be paying rent to the partnerships to assist in funding X and Y’s retirement. The purchase of the new property was to drought proof the enterprise as it’s being taken over by X and Y’s sons. Upon the purchase of the new properties, X has taken a step back from running the enterprise. Their children are the ones primarily in charge of the day to day running of the enterprise. X assists when needed. Y has handed their role in the enterprise to one of their children. X and Y have purchased a house as their retirement house.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subdivision 152-A | Income Tax Assessment Act 1997 section 152-110 | Income Tax Assessment Act 1997 paragraph 152-110(1)(d)(i)