The case considered whether the taxpayer was entitled to small business capital gains relief under Division 152 of ITAA 1997 in relation to the sale of a mobile home park; and whether the main use of the mobile home park was to "derive rent" under s 152-40(4)(e) of ITAA 1997.
The AAT held that the main use of the mobile home park was to derive rent and therefore the park was not an "active asset" under s 152-40. Further, the taxpayer did not satisfy the maximum net asset value test in s 152-15. The sum of the net values of the CGT assets of the taxpayer and its "connected entities" exceeded $5m. Accordingly, the AAT held that the taxpayer was not entitled to small business relief under Division 152 of the ITAA 1997 in relation to the capital gain it made on the sale of the mobile home park.
The ATO states that it agrees with the AAT's decision.