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Small Business Capital Gains Tax Concessions - Passive assets - Business conducted by affiliate or c

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Newbie

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Replies 3

Hi,

To satisfy the basic conditions for SBCGT Concessions the asset must be an active asset.

The asset which is to be sold is owned by a company which does not carry on a business.

The asset is used exclusively in a business conducted by a discretionary trust which has a turnover of more than $2 million.

The 2 shareholders in the company control the trust and have received all distributions from the trust equally.

Net asset value of all connected entites and affiliates does not exceed $6 million.

Section 152.10 (1A) provides that if the taxpayer (the company) does not carry on a business the basic conditions are satisfied if an affiliate or connected entity of the company is a CGT small business entity.

Does this mean that because the trust is not a small business entity that the samll business CGT concession cannot be claimed even though the net assets or all connected entites and affiliates do not exceed $6 million?

 

1 ACCEPTED SOLUTION

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Best answer

Community Manager

Replies 1

Hi @ Bannisterjbb

 

Thanks for your patience.

 

The trust does not qualify as small business entity under section 152-10(1A) of the ITAA 1997. The section states that the entity that is your affiliate or connected with you must be a CGT small business entity.

 

 It does not allow using the alternative maximum net asset value (MNAV) test. This means that the asset being disposed of by the company will not satisfy the active asset test.

 

KylieS

3 REPLIES 3
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Moderator

Replies 0

Hi @Bannisterjbb,

 

Doesn't look like anybody in the Community has been able to answer this one for you. We're going to send it off to a technical area to get a response and we'll be in touch soon.

 

Thanks, NateH

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Best answer

Community Manager

Replies 1

Hi @ Bannisterjbb

 

Thanks for your patience.

 

The trust does not qualify as small business entity under section 152-10(1A) of the ITAA 1997. The section states that the entity that is your affiliate or connected with you must be a CGT small business entity.

 

 It does not allow using the alternative maximum net asset value (MNAV) test. This means that the asset being disposed of by the company will not satisfy the active asset test.

 

KylieS

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Newbie

Replies 0

Thanks Kylie