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Whether CGT roll-over relief is available to a taxpayer in respect of a year of income in which the taxpayer disposes of an interest in a market gardening property.

The taxpayer is entitled to roll-over relief in respect of sale of an interest in the market gardening property.

The taxpayer and the taxpayer's spouse purchased a rural property which they improved and established as a market gardening business. They propose to sell the property and expect to realise a capital gain on sale of the property. It is expected that the net capital gain will be less than $5 million. The taxpayer then proposes to buy another rural property (within the required timeframe) also to be used solely for a market gardening business.

Roll-over relief under Division 17A ( Income Tax Assessment Act 1936 (ITAA 1936)) allows a capital gain on the sale of a small business asset to not be assessable but instead to be used in reducing the cost base of replacement assets, subject to satisfaction of conditions listed in subsections 160ZZPP (ITAA 1936) and 160ZZPL (ITAA 1936).

In order for roll-over relief to be given to a taxpayer the threshold criteria listed in paragraph 160ZZPL(7)(b) (ITAA 1936) must be satisfied at the time immediately before the disposal of the relevant assets. Subsection 160ZZPL(7) (ITAA 1936) states that an asset of a business carried on by a taxpayer is a roll-over asset in respect of the taxpayer in respect of a year of income if the criteria outlined in section 160ZZPP (ITAA 1936) are complied with at the disposal test time.

The taxpayer satisfies the conditions for eligibility for roll-over relief contained in Division 17A (ITAA 1936).