Private ruling: CGT - small business concessions
Date of advice: 4 July 2025
Published: 1 September 2025
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Will the capital gain derived from the sale of the Property in the year ended 30 June 20YY be a discount capital gain under Subdivision 115-A of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: You would be eligible to apply the 50% general discount under Division 115-A of the ITAA 1997 to reduce the capital gain made on the disposal of the Property as you held the Property for over 12 months before the CGT event occurred. | Q2: Are you eligible to apply the small business retirement exemption under Division 152-D of the ITAA 1997 to the capital gain on the sale of the property? | A2: Yes. A CGT event happened to your Property in February 20YY. The sale resulted in a capital gain. You do not carry on a business, but the Property was used by the Company to carry on a business. Your spouse (who is your affiliate) is the sole shareholder of the Company. The Company is connected with you because together you and your affiliate control the Company. Therefore, you satisfy the active asset test and the basic conditions. As you meet the basic conditions you are eligible to apply the retirement exemption in Subdivision 152-D of the ITAA 1997. As you over 55 years old there is no requirement to pay any of the exempt amount (up to $500,000) into a complying superannuation fund or RSA.

Relevant facts and circumstances: You purchased the Property in April 20XX. You have incurred $XX in capital improvements since owning the Property. The dwelling on the Property was not used as your main residence or to produce rental income. The property contains a shop front and a house which are separate buildings, with small sheds. The Company has operated a business since 20XX. You are the sole director of the Company. Your spouse is the sole shareholder of the Company. The Property was used by the Company to: • offer the training for the services provided • test methods and store items You and your spouse as well as staff members have access to the Property. Participants also have access during training courses. The Property sold in the 20YY-YY financial year. The Company has an aggregate turnover of less than $2 million. You were over 55 years old when the property sold.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 115 | Income Tax Assessment Act 1997 Subdivision 152-A | Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-40 | Income Tax Assessment Act 1997 section 152-47 | Income Tax Assessment Act 1997 Subdivision 152-D | Income Tax Assessment Act 1997 section 328-110