Submission - When does the business premises exclusion under s CB 19 apply (Income Tax PUB00316)
Chartered Accountants ANZ provided feedback on this draft ‘question we’ve been asked’ (QWBA) which explains when the “business premises” exclusion, section CB 19, applies to land sales taxed under ss CB 6 to CB 11.
The draft QWBA concludes that: “The business premises exclusion in s CB 19 applies to land with a building on it that is occupied by the landowner mainly for carrying on a substantial business. Subject to certain limitations, the exclusion also applies to land reserved with the business premises for the use of the business. The s CB 19 business premises exclusion applies only to the extent that the land sold is business premises. Therefore, any extra land and buildings that are not occupied or reserved by the landowner mainly for carrying on a substantial business remain taxable under the land taxing provisions in ss CB 6 to CB 11. Additionally, the s CB 19 business premises exclusion is not available if the landowner has engaged in a regular pattern of buying or building, then selling, business premises.“
Chartered Accountants ANZ supports the publication of the QWBA and suggest an additional example be included to explain how s CB 19 does not apply when a building is owned by a trust and used by a beneficiary as business premises.
