Private ruling: Income tax – small business concessions
Date of advice: 2 April 2019
Published: May 2019
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Are you entitled to apply the small business capital gains tax concessions? | A1: Yes. You satisfy the basic conditions to access the small business entity concessions as you meet the maximum net asset value test and the property is considered to be an active asset. Further information can be found by searching 'QC 50252' on ato.gov.au | Q2: Are you entitled to apply the small business 15 year exemption to the gain from the sale of the property? | A2: Yes. You won’t have an assessable gain on the sale of the active asset as you have met the basic conditions, are over 55 years old and you have owned the active asset for more than 15 years. The Commissioner also considers that the CGT event has happened in connection with your retirement. Further information can be found by searching 'QC 52288' on ato.gov.au

Relevant facts and circumstances: You purchased a property after 1985. You have resided on the property since the date of purchase. From the date of purchase until 20XX you used the property to operate a business. This business was operated through a partnership. You ceased the business in 20XX. The income from the business activities was included in your tax returns up until the 20XX financial year. From 20XX to 20XX you operated a second business (business 2). You sold business 2 20XX as it was the first step in your retirement plan as a result of ongoing ill health. You had medical issues that contributed towards your move to retirement. You ceased operating business 2 in 20XX when you sold the business however continued to maintain the property. You entered into an options agreement with the eventual purchaser on 20XX. Settlement occurred in 20XX. You are over 55 years old and have now retired since the sale of the property. You satisfy the maximum net asset test as your net assets are under $6 million. At no point during your ownership period was the property rented to a third party.

Relevant legislative provisions: Income Tax Assessment Act 1997 subdivision 152-A | Income Tax Assessment Act 1997 subdivision 152-B | Income Tax Assessment Act 1997 subdivision 152-C | Income Tax Assessment Act 1997 subdivision 152-E | Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-110 | Income Tax Assessment Act 1997 section 152-330 | Income Tax Assessment Act 1997 section 152-215