Private ruling: Small business CGT concessions - active asset and meaning of active asset
Date of advice: 12 September 2022
Published: November 2022
Ruling period: Year ending 30 June 2023
Date scheme commenced: 1 July 2022

Ruling: Q1: Does the Property satisfy the active asset test pursuant to section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997) and the meaning of active asset pursuant to section 152-40 of the ITAA 1997? | A1: Yes. You acquired the property in the relevant year as joint tenants, and it has been used in the course of carrying on a business by a connected entity for at least half of the ownership period. Therefore, the Property satisfies the active asset test in section 152-35 of the ITAA 1997 and the meaning of active asset in section 152-40 of the ITAA 1997.

Relevant facts and circumstances: You purchased a property as joint tenants in the relevant year. You are a beneficiary of the Family Trust ('the Trust'). You have received more than 40% of the Trust's income in distributions for at least 7 years. The Trust holds above 40% of ownership in the Company. The Company has been carrying on a business on the Property since its purchase date until now.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-40 | Income Tax Assessment Act 1997 section 328-125 Further issues for you to consider | This ruling has not considered the basic conditions which must be satisfied in order to apply the small business CGT concessions.