Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 152 - Small business relief  

Subdivision 152-B - Small business 15-year exemption  

SECTION 152-110   15-year exemption for companies and trusts  

152-110(1)    
An entity that is a company or trust can disregard any *capital gain arising from a *CGT event if all of the following conditions are satisfied:

(a) the basic conditions in Subdivision 152-A are satisfied for the gain;

(b) the entity continuously owned the *CGT asset for the 15-year period ending just before the CGT event;

Note:

Section 152-115 allows for continuation of the period if there is an involuntary disposal of the asset.

(c) the entity had a *significant individual for a total of at least 15 years (even if the 15 years was not continuous and it was not always the same significant individual) during which the entity owned the CGT asset;

(d) an individual who was a significant individual of the company or trust just before the CGT event either:

(i) was 55 or over at that time and the event happened in connection with the individual ' s retirement; or

(ii) was permanently incapacitated at that time.

152-110(1A)    

For the purposes of paragraphs (1)(b) and (c), disregard subsection 149-30(1A) (which applies if an asset stops being a pre-CGT asset).

152-110(2)    

Any *ordinary income or *statutory income the company or trust *derives from a *CGT event that would be covered by subsection (1) (assuming the event gave rise to a *capital gain, even if it didn ' t) is neither assessable income nor *exempt income.

Exception

152-110(3)    

However, subsection (2) does not apply to income *derived by a company or trust as a result of a *balancing adjustment event occurring to a *depreciating asset:

(a) whose decline in value is worked out under Division 40 ; or

(b) deductions for which are calculated under Division 328 .