Private ruling: CGT - active asset test
Date of advice: 6 May 2025
Published: 7 July 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 20XX

Ruling: Q1: Does the Property that was disposed of by the Company satisfy the conditions of the active asset test under section 152-35 of the Income Tax Assessment Act 1997 ? | A1: Yes. You owned the Property for more than 15 years. The Commissioner accepts that the Property has been used in the course of carrying on a business by a connected entity for more than 7½ years during the ownership period. Therefore, the Property meets the active asset test in section 152-35 of the Income Tax Assessment Act 1997 .

Relevant facts and circumstances: The Company that is part of a group of entities that includes a Trust of which the Company is the trustee. The Company purchased a property in 20XW in its own capacity, and it was used to graze livestock that it purchased over a period of six years. The Trust carried on a business which included the sale of livestock. The group of entities, predominantly the Company and the Trust, implemented a breeding program which used the livestock that grazed on the property. The Trust is connected to the Company. The breeding program was not successful, and the Company sold its livestock. The Company then sold the Property in 20XY.

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