Private ruling: CGT - 15 year exemption
Date of advice: 13 March 2024
Published: 22 April 2024
Ruling period: Year ending 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY | Year ending 30 June 20YY
Date scheme commenced: 1 January 20YY

Ruling: Q1: Are you entitled to disregard the capital gain made on the disposal of the property under the 15-year exemption? | A1: No.

Relevant facts and circumstances: A property was originally purchased by the company prior to 20 September 19YY. You inherited X shares in the company in 19YY. At this time you were a Y% shareholder in the company. You inherited a further X shares in 20YY. At this time you were a Y% shareholder in the company. You acquired a final X shares in 20YY giving you a Y% shareholding in the company. Other shareholders of the company were various family members. The property was transferred to you in the 20YY-YY financial year prior to the company being deregistered. Other property held by the company at that time was sold or transferred to other family members.

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

Reasons for decision: Detailed Reasoning - 15-year exemption: Section 152-105 of the ITAA 1997 provides a small business 15-year exemption for an individual. Under this section, you can disregard the capital gain from the disposal of a CGT asset if: (a) you satisfied the basic conditions in Subdivision 152-A of the ITAA 1997 for the gain (b) you continuously owned the CGT asset for the 15-year period ending just before the CGT event happened (c) if the CGT asset is a share in a company or an interest in a trust - the company or trust had a significant individual for a total of at least 15 years during which you owned the CGT asset (d) either: i. you are 55 or over at the time of the CGT event and the event happened in connection with your retirement; or ii. you are permanently incapacitated at the time of the CGT event. | Detailed Reasoning - Application to your circumstances: In this case, you acquired the XXXX property in the 20YY-YY financial year when the company was liquidated. Therefore, you have not continuously owned the asset for a 15-year period and do not satisfy the conditions set out in section 152-105 of the ITAA 1997.