Document ID: chunk:federal_register_of_legislation:C2010C00612:clause:1_1:p6
Version: federal_register_of_legislation:C2010C00612
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 6/19)
Character Range: 14327–16811

during at least half of the period beginning at the later of:
 (i) when you acquired the asset; and
 (ii) if you have owned the asset for more than 15 years—15 years before the time that applies under paragraph (a);
  and ending at the time that applies under paragraph (a).

152‑40  Meaning of active asset

 (1) A *CGT asset is an active asset at a given time if, at that time, you own it and:
 (a) use it, or hold it ready for use, in the course of carrying on a *business; or
 (b) it is an intangible asset that is inherently connected with a business that you carry on (for example, goodwill or the benefit of a restrictive covenant); or
 (c) it is used, or held ready for use, in the course of carrying on a business by:
 (i) your *small business CGT affiliate; or
 (ii) another entity that is *connected with you.

 (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 trust for CGT purposes for the income year in which that time occurs; and
 (b) the total of:
 (i) the market values of the active assets of the company or trust; and
 (ii) any *capital proceeds that the company or trust received, during the 2 years before that time, from *CGT events happening to its active assets and that the company or trust holds in the form of cash or debt pending the acquisition of new active assets;
  is 80% or more of the market value of all of the assets of the company or trust.

Example: Paragraph 152‑35(b) requires a CGT asset to have been an active asset over a period of time. For a share in an Australian resident company to meet this requirement, the company would have to satisfy the 80% test in this subsection throughout that same period.

Exceptions

 (4) However, the following *CGT assets cannot be active assets:
 (a) interests in an entity that is *connected with you, other than *shares and interests covered by subsection (3);
 (b) shares in companies, other than shares covered by subsection (3);
 (c) interests in trusts, other than