*Re Jakjoy Pty Ltd and FCT – CGT – properties used in ‘carrying on business’ of deriving rent not “active assets” – because of the ‘deriving rent’ exclusion [42]

The AAT has confirmed that the exclusion from the CGT small business concession in s 152-40(4)(e) of the ITAA 1997 for assets used “mainly to derive rent” applies (as intended) even if the assets are used in “carrying on a business” of a deriving rent. As a result, the AAT held that a range of commercial properties that the taxpayer used in carrying on a business of deriving rent did not qualify as “active assets” for the purposes of qualifying for the small business concessions, even though the Commissioner had previously ruled (in respect of another matter) that the taxpayer was “carrying on a business” in respect of the use of the commercial properties to derive rent.

(AAT Case [2013] AATA 526, Re Jakjoy Pty Ltd and FCT, AAT, Ref Nos 2012/4760-4765, Walsh SM, 25 July 2013.)

[LTN 144, 29/7/13]