Date posted: 11/06/2019

Submission - When does the business premises exclusion to the bright-line test apply? (Income Tax PUB00316)

CA ANZ provided feedback on this draft ‘question we’ve been asked’ (QWBA) which explains the business premises exclusion that applies for the purposes of the bright-line test.

The draft QWBA concludes that “Land that has been used predominantly as business premises is not subject to the bright-line test, even if the land has a dwelling on it. “Business premises” means a building and any surrounding associated land from which a person carries on a business.

Land will be used predominantly as business premises where:

  • more than 50% of the area of the land has been used as business premises, and
  • the land has been used as business premises for more than 50% of the time the seller owned it.”

In CA ANZ’s view the exclusion should not be limited to land with a building, and each case should be considered on its own facts and circumstances. For example, a car yard should qualify as “business premises” even if there is no building.

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