In our earlier article, we noted the Federal Court in FCT v Eichmann [2019] FCA 2155 (Eichmann) in late 2019 had found in favour of the Australian Taxation Office (ATO) (appealing a decision of the Administrative Appeals Tribunal) and held land used for storage was not an active asset for the purposes of the small business capital gains tax (CGT) concessions in Division 152 of the Income Tax Assessment Act 1997 (ITAA 1997).

The taxpayer in Eichmann has now appealed to the Full Federal Court against the Federal Court’s decision.

The Federal Court’s decision was seen to be controversial in some quarters in that it effectively narrowed the active asset test under Division 152 of the ITAA 1997 by requiring the asset to be used “in the course” of the relevant business as an integral part of the business and not just “in relation to” that business.  We await with interest the outcome of the Full Federal Court appeal to provide further clarity in the application of the small business CGT concessions.

If you require advice in relation to the small business CGT concessions or have any questions in relation to the above, please contact us:

Neil Brydges
Principal Lawyer | Accredited Specialist in Tax Law
M +61 407 821 157 | T +61 3 9611 0176
E: nbrydges@sladen.com.au