The taxpayer has appealed to the Federal Court against the decision in Re PFGG and FCT [2015] AATA 972. In that decision, the AAT confirmed that the taxpayer involved in the mining industry which made a capital gain of $5.4m from the sale of Western Australia mining tenements was not eligible for the CGT small business concessions as it failed the $2m “small business entity” (SBE) test in Subdiv 328-C of the ITAA 1997.

[LTN 9, 15/1/16]

[2015] AATA 972 – catchwords

INCOME TAX – small business entities – tax concessions – 50% capital gains tax “active assets” reduction – aggregated turnover – annual turnover – company “connected with” the applicant – fuel disbursements – “ordinary income” – meaning of “in the ordinary course of carrying on a business” – meaning of “sales of retail fuel” – objection decision affirmed

[FJM Note:      It appears that the taxpayer failed the ‘minimum net asset value test’ and had to resort to the alternative ‘small business entity’ test, where $2m turnover cap is relevant and so is the meaning of the relevant ‘turnover’ tests.]