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29 Jul 13 Rental properties were not "active assets" - Jakjoy

The AAT has held, for the purposes of the CGT small business relief concessions, that three commercial properties owned and leased out by the taxpayer were not "active assets" under the definition of "active asset" in s 152-40 of ITAA 1997, and thus did not satisfy the "active asset test" in s 152-35 of ITAA 1997.

The taxpayer argued that it was carrying on a small leasing business and that the Commissioner's interpretation of the relevant provisions unfairly discriminated against small leasing businesses.

The AAT said, at para 51:

"It is the Tribunal’s view that it is clear on the face of the words used in s152-40(4)(e) of the ITAA 1997 that an asset whose main use by the taxpayer is to derive rent cannot be an 'active asset'. "

Jakjoy Pty Ltd and FCT [2013] AATA 526 (AAT, Walsh SM, 25 July 2013).


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