Private ruling: CGT - small business exemption
Date of advice: 16 October 2023
Published: 27 November 2023
Ruling period: Year Ending 30 June 2023
Date scheme commenced: June 2021

Ruling: Q1: Do the small business CGT 15-year exemption rules apply to the sale of this property to allow the capital gain to be disregarded in the estate income tax return for the year ended 30 June 2023? | A1: Yes, small business CGT 15-year exemption rules apply to the sale of this property to allow the capital gain to be disregarded in the estate income tax return for the year ended 30 June 2023. The taxpayer held the property in joint ownership for more than 15 years and while they weren't 55 years when they died, they were permanently incapacitated.

Relevant facts and circumstances: The deceased taxpayer (the deceased) owned 50% of the property, as tenants in common with their business partner (partner), who owned the remaining 50%. The deceased and their partner operated a business (the business) from the property for over 15 years to the deceased's date of death in 20XX. The estate then effectively held the deceased interest in the property until its sale in 20XX.The partner continued to operate the business from the property until 20XX, when the preparation for the sale began. The property sold in 20XX. The business and its affiliates and connected entities have assets less than $6,000,000. The sale of the property occurred within two years of the date of death. The deceased was incapacitated and terminally ill.

Relevant legislative provisions: Income Tax Assessment Act section 152-10(1) | Income Tax Assessment Act section 152-15 | Income Tax Assessment Act section 152-35 | Income Tax Assessment Act section 152-80 | Income Tax Assessment Act section 152-105 | Income Tax Assessment Act Division 152