SWPD and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal considered the dispute between SWPD (the Applicant) and the Commissioner of Taxation (the Commissioner) regarding the Applicant's entitlement to Capital Gains Tax (CGT) small business concessions. The Applicant sought to reduce a capital gain made on the sale of a property, arguing that the concessions under Division 152 of the Income Tax Assessment Act 1997 should apply. The Commissioner had disallowed the Applicant's objection to the assessment.

The primary legal issues before the Tribunal were whether the Applicant was carrying on a business for the purposes of Subdivision 152-A of the Act, and consequently, whether the property satisfied the active asset test, thereby meeting the basic conditions for relief under section 152-10(1). The Applicant bore the burden of proving that the Commissioner's assessment was incorrect.

The Tribunal accepted the Applicant's evidence regarding the activities undertaken on the property, which included maintaining roads and fences, clearing fallen logs, eradicating gorse weed, and establishing a new access road. These activities, corroborated by the Applicant's accountant and a contractor, were found to demonstrate the carrying on of a business throughout the period of ownership, including the 2016-17 tax year when the property was sold. The Tribunal concluded that the Applicant had satisfied the burden of proof and that the property met the active asset test, meaning the basic conditions for relief under section 152-10(1) were met.

Accordingly, the Tribunal set aside the Commissioner's objection decision and remitted the matter to the Commissioner for reconsideration in accordance with the Tribunal's findings.