Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 5/18)
Character Range: 2812740–2815316

year if:
 (a) you are a *small business entity for the income year; and
 (b) you would be a small business entity for the income year if each reference in section 328‑110 to $10 million were a reference to $2 million.
Note: For the purposes of subsection (1A) or (1B), in determining whether an entity would be a small business entity, see also sections 152‑48 and 152‑78.

Passively held assets—affiliates and entities connected with you
 (1A) The conditions in this subsection are satisfied in relation to the *CGT asset in the income year if:
 (a) your *affiliate, or an entity that is *connected with you, is a *CGT small business entity for the income year; and
 (b) you do not carry on a *business in the income year (other than in partnership); and
 (c) if you carry on a business in partnership—the CGT asset is not an interest in an asset of the partnership; and
 (d) in any case—the CGT small business entity referred to in paragraph (a) is the entity that, at a time in the income year, carries on the business (as referred to in subparagraph 152‑40(1)(a)(ii) or (iii) or paragraph 152‑40(1)(b)) in relation to the CGT asset.
Note 1: The meaning of connected with is affected by section 152‑78.
Note 3: For businesses that are winding up, see section 152‑49 and subsection 328‑110(5).

Passively held assets—partnerships
 (1B) The conditions in this subsection are satisfied in relation to the *CGT asset in the income year if:
 (a) you are a partner in a partnership in the income year; and
 (b) the partnership is a *CGT small business entity for the income year; and
 (c) you do not carry on a *business in the income year (other than in partnership); and
 (d) the CGT asset is not an interest in an asset of the partnership; and
 (e) the business you carry on as a partner in the partnership referred to in paragraph (a) is the business that you, at a time in the income year, carry on (as referred to in subparagraph 152‑40(1)(a)(i) or paragraph 152‑40(1)(b)) in relation to the CGT asset.
Note: For businesses that are winding up, see section 152‑49 and subsection 328‑110(5).

Additional basic conditions for shares in a company or interests in a trust
 (2) The following additional basic conditions must be satisfied if the *CGT asset is a *share in a company, or an interest in a trust, (the object entity):
 (a) the CGT asset would still satisfy the active asset test (see section 152‑35) if the assumptions in subsection (2A) were made;
 (b) if you do not satisfy the maximum net asset value test (see section 152‑15)—you are carrying on a *business just