Private ruling: Capital gains tax and the small business concessions
Date of advice: 26 June 2019
Published: September 2019
Ruling period: Year ended 30 June 2019
Date scheme commenced: 1 July 2017

Ruling: Q1: Does the goodwill satisfy the active asset test? | A1: Yes | Q2: Can you apply the small business rollover to the capital gain on the sale of the goodwill? | A2: Yes You satisfy the conditions of the active asset test as you have used the asset for at least half of the test period in the course of carrying on a business and the exceptions do not apply. You can apply the small business rollover to the capital gain on the sale of the goodwill. Further information can be found by searching 'QC 44192' on ato.gov.au

Relevant facts and circumstances: The Company is selling its goodwill for $X. There is no cost base. The company has used the goodwill in its business for 10 years. The Company's net assets are less than $6,000,000 and its turnover is $X. The Company wishes to apply the small business active asset reduction and rollover.

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 152-205 and | Income Tax Assessment Act 1997 subdivision 152-E.