Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p11
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 11/18)
Character Range: 2827229–2829682

also a CGT asset of the entity;
treat the *market value of that right as if it were nil at the valuing time.

Active asset test

152‑35  Active asset test
 (1) A *CGT asset satisfies the active asset test if:
 (a) you have owned the asset for 15 years or less and the asset was an *active asset of yours for a total of at least half of the period specified in subsection (2); or
 (b) you have owned the asset for more than 15 years and the asset was an active asset of yours for a total of at least 71/2 years during the period specified in subsection (2).
 (2) The period:
 (a) begins when you *acquired the asset; and
 (b) ends at the earlier of:
 (i) the *CGT event; and
 (ii) if the relevant business ceased to be carried on in the 12 months before that time or any longer period that the Commissioner allows—the cessation of the business.

152‑40  Meaning of active asset
 (1) A *CGT asset is an active asset at a time if, at that time:
 (a) you own the asset (whether the asset is tangible or intangible) and it is used, or held ready for use, in the course of carrying on a *business that is carried on (whether alone or in partnership) by:
 (i) you; or
 (ii) your *affiliate; or
 (iii) another entity that is *connected with you; or
 (b) if the asset is an intangible asset—you own it and it is inherently connected with a business that is carried on (whether alone or in partnership) by you, your affiliate, or another entity that is connected with you.
Note 1: An intangible asset need satisfy only paragraph (a) or paragraph (b).
Note 2: The meaning of connected with in subparagraph (1)(a)(iii) and paragraph (b) is affected by section 152‑78.
Note 3: An example of an asset that is inherently connected with a business is goodwill or the benefit of a restrictive covenant.
Note 4: For businesses that are winding up, see section 152‑49 and subsection 328‑110(5).
 (2) Subsection 392‑20(1) is disregarded in determining, for the purposes of subsection (1) of this section, whether an entity is carrying on a *business.
Note: An entity would be taken to be carrying on a primary production business under subsection 392‑20(1) if the business is carried on by a trust and the entity is presently entitled to trust income.
 (3) A *CGT asset is also an active asset at a given time if, at that time, you own it and:
 (a) it is either a *share in a company that is an Australian resident at that time or an interest in a trust that is a *resident