# Reviewer verdict — bounty-09-cgt-active-asset-test (supplement) > **Reviewer:** Harley Dickfos, Tax Agent (TPB 26334789) > **Label:** Round 1 submission (superseded by resubmit above) > **PII sweep:** applied. --- --- brief_id: bounty-09-cgt-active-asset-test bounty_title: "CGT small business active-asset test" statutory_anchors: "s 152-35, s 152-40 ITAA 1997; TR 2019/1" reviewer: name: "Harley Dickfos" credential_class: "" # TPB registration_status: "" # active jurisdiction: "Australia" attribution_posture: "named" # anonymous reviewed_calculator_version: "" # copy from brief submission_date: "" # 2026-07-14 top_level_verdict: "" # ACCEPT verdict_hash: "" # (we compute this on receipt) --- # Reviewer Verdict — CGT small business active-asset test **Bounty:** bounty-09-cgt-active-asset-test ## 1. Top-level verdict _Choose one: **ACCEPT** Accept - **ACCEPT** — the calculator's statute-to-predicate translation is correct on the facts of the brief. Minor stylistic comments allowed. **Your top-level verdict:** I would conclude that the worked example produces the correct outcome and is broadly consistent with the active asset provisions. However, it should not be treated as a complete calculator specification without further refinement. In particular: the example may imply a 50% threshold that does not appear in the legislation; it assumes floor area is the preferred measurement methodology; it provides limited guidance regarding vacancy periods; it does not adequately address changing ownership or connected-entity relationships over time; and it does not fully explore the interaction between s 152-40(1), s 152-40(1A) and s 152-40(4)(e). Accordingly, the example is best viewed as a useful illustration of the legislative outcome rather than a complete implementation specification. --- ## 2. Per-question verdicts ```yaml per_question_verdicts: - question_number: 1 verdict: "" # ACCEPT citation_authority: "" # section reference or case citation reasoning: | # The three principal limbs in s 152-40(1) are: the asset is used, or held ready for use, in a business carried on by the taxpayer; the asset is used, or held ready for use, in a business carried on by an affiliate; or the asset is used, or held ready for use, in a business carried on by an entity connected with the taxpayer. # Optional — anything surfaced by this question worth banking. - question_number: 2 verdict: "" # ACCEPT citation_authority: "" # section reference or case citation reasoning: | # Under s 152-40(4)(e), an asset is excluded where its main use is to derive rent, unless that use is only temporary. The exclusion applies only where rent-producing use is the asset's predominant use. The derivation of some rent does not, by itself, cause the exclusion to apply. edge_case_notes: | # Optional — anything surfaced by this question worth banking. - question_number: 3 verdict: "" # ACCEPT citation_authority: "" # section reference or case citation reasoning: | # Taxation Ruling TR 2019/1 treats the "main use" inquiry as a comparative question that must be determined having regard to the facts and circumstances. Appropriate indicators may include floor area, rental value, income generation, time-based measures, or other objective methodologies. The focus is on identifying the asset's predominant use in substance. edge_case_notes: | # Optional — anything surfaced by this question worth banking. - question_number: 4 verdict: "" # ACCEPT citation_authority: "" # section reference or case citation reasoning: | # For the purposes of s 152-35, a vacant period will generally count as neither active asset time nor excluded time unless the asset was being held ready for use in carrying on a business. Only periods that satisfy the active asset requirements contribute toward the active asset test. edge_case_notes: | # Optional — anything surfaced by this question worth banking. - question_number: 5 verdict: "" # ACCEPT citation_authority: "" # section reference or case citation reasoning: | # Section 152-40(1A) allows business use by a connected entity or affiliate to be attributed to the asset owner for active asset purposes. Consequently, a lease to a wholly-owned operating subsidiary may still support active asset status, provided the connected entity uses the asset in carrying on a business and the remaining legislative requirements are satisfied. edge_case_notes: | # Optional — anything surfaced by this question worth banking. - question_number: 6 verdict: "" # ACCEPT citation_authority: "" # section reference or case citation reasoning: | # The worked example assumes that ownership, control and connected-entity relationships remain unchanged throughout the ownership period. A calculator should not make this assumption. Because active asset status is tested throughout the ownership period, the calculator should accommodate changes such as: changes in partnership interests; admission or retirement of partners; changes in trust ownership arrangements; changes of trustee; changes in shareholdings affecting connected-entity status; business restructures; and transactions that cause an entity to cease being connected with the asset owner. The calculator should re-assess active asset status whenever a relevant ownership, control or connected-entity change occurs. edge_case_notes: | # Optional — anything surfaced by this question worth banking. ``` --- ## 3. Citation audit _List every statutory section, ATO ruling, or case-law citation the calculator/brief relies on. Mark each: ✓ correct citation / ✗ wrong citation / ⚠ citation exists but is misapplied._ | # | Authority as cited | Your assessment | Notes | |Authority Status Comment ITAA 1997 s 152-40(1) ✓ Correctly states the core active asset test: ownership plus use/held ready for use in a business carried on by the taxpayer, affiliate, or connected entity. ato ITAA 1997 s 152-40(1A) ✗ This subsection is repealed; the current text shown in the legislation is “Repealed by No 42 of 2009.” The connected-entity concept is now handled through s 152-40(1) and the definition of “connected with” in s 152-78, not s 152-40(1A). ato ITAA 1997 s 152-40(4) ✓ Correctly identified as the exclusions subsection. ato ITAA 1997 s 152-40(4)(e) ✓ Correctly identified as the rent / interest / royalty / annuity / FX gains exclusion, subject to the temporary-use and development exceptions. ato ITAA 1997 s 152-40(4A) ✓ Correctly supports the rule that, for paragraph (4)(e), affiliate/connected-entity use is treated as your use and personal use is disregarded. ato ITAA 1997 s 152-35 ✓ Correctly identified as the active asset test section. ato ITAA 1997 s 152-35(1) ✓ Correct on the 15-years-or-less / more-than-15-years timing thresholds. ato +1 ITAA 1997 s 152-35(2) ✓ Correctly describes the “relevant period” for the active asset test. ato ITAA 1997 s 152-78 ⚠ This section is relevant to the meaning of “connected with,” but it is not itself the operative test for your Component 1A wording. The brief should reference it if it wants to explain connected entities, but it should not present s 152-40(1A) as the operative current provision. ato ITAA 1997 s 152-10(1)(d) ⚠ This is a valid gateway provision for the CGT small business concessions, but it is not part of the calculator logic you asked for unless the calculator is also testing overall concession eligibility. ato +1 ATO rulings and determinations Authority Status Comment TD 2021/2 ✓ Correctly relied on for the proposition that an asset whose main use is to derive rent is excluded from active asset status even if the owner otherwise carries on a business. ato TD 2006/78 ⚠ The citation exists and is relevant to premises used in a business providing accommodation for reward, but it is only useful in that specific accommodation/business context. It should not be treated as authority for all mixed-use or ordinary leased-property cases. ato TR 2019/1 ⚠ The ruling may be relevant to whether an entity carries on a business, but it does not answer the active asset exclusion question by itself. It should be used only as background, not as the core authority for the calculator’s active asset conclusion. ato TR 2006/10 ⚠ This is a public rulings / settlements reference in TD 2021/2, not authority for the substantive active asset logic. It should not be cited as legal support for the calculator’s decision rules. ato Case law Authority Status Comment Re Jakjoy Pty Ltd and FCT AATA 526 ✓ Correctly supports the proposition that assets mainly used to derive rent are excluded from being active assets, even if the taxpayer otherwise carries on a business of deriving rent. sraccountants.clientcommunity.com Any other case on rent v business use ⚠ Your brief states a “comparative analysis” with no mandated methodology. That statement is more of an analytical approach than a direct case citation, and it should be backed by authorities if you want it to be framed as settled law rather than a drafting methodology. --- ## 4. Edge cases surfaced _Anything the brief did not cover that you think should be tested by a future revision.No 1. 2. 3. --- ## 5. TaxGenii appendix coverage feedback _Was the pre-loaded statutory appendix (file 05) adequate? What was missing? Yes --- ## 6. Attestation I have reviewed this bounty artefact bundle on the facts as presented. My verdict above reflects my professional judgement as at the submission date. I understand my verdict will be minted into the public reviewer registry with the attribution posture stated in the frontmatter. **Signed:**HDICKFOS **Name:** Harley Dickfos **Credential:** TPB **Date:**14/07/2026