Private ruling: CGT - small business 15-year exemption
Date of advice: 28 June 2024
Published: 12 August 2024
Ruling period: Year ended 30 June 2023
Date scheme commenced: 1 July 2022

Ruling: Q1: Are you entitled to apply the small business 15-year exemption in section 152-105 of the Income Tax Assessment Act 1997 (ITAA 1997) to disregard your share of the capital gain made on the sale of the property? | A1: Yes. In your case, the basic conditions contained in Subdivision 152-A of the ITAA 1997 are satisfied because: • a capital gains tax (CGT) event happened when you disposed of your share of the property • the event resulted in a gain • you satisfied the maximum net asset value test just before the CGT event, and • you owned your share of the property for more than 15 years and the property was used in the business of the partnership for a total of at least 7½ years of your ownership period In addition, • you continuously owned your share of the property for the 15-year period ending just before the CGT event • you were at least 55 years old when you disposed of your share of the property, and • the disposal happened in connection with your retirement. As such, you qualify for the small business 15-year exemption in section 152-105 of the ITAA 1997 in relation to the property and can disregard your share of the capital gain made on its disposal.

Relevant facts and circumstances: You purchased a property over XX years ago. You conducted a primary production business on the property through a partnership throughout the ownership period. No other sources of income were received relating to the property. The net value of the CGT assets of yours, any entities connected with you, your affiliates or entities connected with your affiliates did not exceed $6million just before the property was sold for a gain. You are now fully retired and were over 55 when the property was sold.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 section 152-15 | Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-40 | Income Tax Assessment Act 1997 section 152-105