2) On 1 August 2007, Tanya entered into a contract to purchase a block of land for $115,000. She also paid stamp duty of $5000. This land was mostly vacant but had an empty garage in the corner. Settlement was on 1 December 2007. On 1 February 2008 Tanya paid a builder to build a retail shop premises on the land. This cost her $280,000 and was completed in June 2008.
After the retail premises was built Tanya used it to run a dress store aimed at wealthy customers. In July 2008 Tanya purchased an expensive leather sofa for $20,000 for her customers to use while in the store.
While Tanya owned and ran the store, annual turnover was between $2,800,000 and $2,900,000. Tanya also rented out the garage on the corner of the block of land for one of her shop customers to store their expensive vintage car. She would collect about $15,000 a year in rent from this.
Tanya decided during March 2015 (when she was 51 years of age) to sell her business, and so entered into the following contracts:
• Sale of land with shop and garage for $900,000.
• Sale of sofa used in shop for $15,000.
• A contract that Tanya will not compete with the purchaser of the business for ?the following 4 years for $150 000. ?In April 2015 Tanya purchased a corporation called TLC Pty Ltd for $400,000. The company’s only assets were Australian Government Bonds worth $100,000 and a restaurant worth $300,000.
When Tanya sold her shop in March 2015, she also owned the following:
• House that was her primary residence. This was purchased in 2004 for $650,000 and is now worth $1,400,000.
• A rental property purchased in 2009 for $350,000 and is currently worth $550,000 but has a $50,000 mortgage on it.
• Shares in a company called Invist Pty Ltd. Tanya owned 65% of the shares in this company. This company owns several properties, and Tanya’s share of the company is worth $975,000.
• Shares in Commonwealth Bank that were purchased in 2001 for $100 000 and are now worth $600 000.
• A motor vehicle, current market value of $30,000. Tanya had been using this car exclusively for business purposes, but she intends on using it for personal purposes after the sale of the store. ?Please only focus upon the Capital Gains Tax implications for this question. ?Please refer to all of the relevant sections of the legislation, cases and any other scholarly material when providing advice to Tanya. Advise Tanya on:
• Any Capital Gains Tax liabilities for her in relation to her activities.
• Specifically, make sure that your discussion includes advice on whether Tanya can take advantage of the CGT small business concessions to reduce the amount of tax payable. Tanya is specifically interested in whether she is eligible for the Small Business Rollover, as well as her eligibility for the other CGT small business concessions.