Is A Holiday Unit An Active Asset?

The recent AAT decision in Carson's case held that a single holiday unit was not considered to be an active asset for the purposes of the small business CGT concessions contained in Div 152 of the ITAA 1997.

Facts

The taxpayers purchased a single holiday unit for $500,000 on 31 August 1999 and have used the property since that time to provide short term tourist accommodation, usually for stays of about a week to two weeks. At no time were there any lease agreements entered into. Occasionally, the unit was used for private purposes, e.g. for a two week period in 2006.

The majority of bookings were taken via a local real estate agent who also attended to minor repairs. The property was serviced twice a year and during the year, a contract cleaner was used after each stay at the unit. Advertising was done by the agent but the taxpayers produced and distributed brochures as required. The taxpayers