Edited version of private advice

Authorisation Number: 1052483107402

Date of advice: 4 December 2025

Ruling

Subject: CGT - small business concessions

Question

Will the Commissioner exercise his discretion under paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the timeframe to make a choice, to apply any available small business concessions under Division 152 of the ITAA 1997 to the gain that arose from the disposal of your interests in the property?

Answer

Yes.

A choice available under the CGT provisions must be made by the time the relevant income tax return is lodged or within such further time as the Commissioner allows. In your case, no choice was made in relation to the small business CGT concessions when the relevant income tax return was lodged because the capital gain was not included in the return due to a misunderstanding about the timing of the CGT event. With consideration of the relevant circumstances, the Commissioner will allow an extension of time to make a choice under paragraph 103-25(1)(b) of the ITAA 1997.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You acquired an interest in the Property post-CGT. The Property was initially held jointly with your former spouse, and then you became the sole owner under a property settlement.

The Property exceeds 2 hectares and included a dwelling that was used as your main residence for part of the period of ownership. The Property was also used in businesses variously operated by you and your connected entities.

You sold the Property under a standard sale contract. The settlement occurred on the agreed date in a subsequent financial year.

You lodged the relevant income tax return by the due date. However, you were not aware that a CGT event was triggered by executing the sale contract. As the contract had not yet settled, you did not advise your tax agent of the sale as part of the tax return preparation process. As such, the CGT event was not reported in the relevant tax return.

Shortly after settlement, you sought specialist tax advice regarding the capital gain on sale and the application of the main residence exemption and the small business CGT (SBCGT) concessions. At this time, you were advised that the timing of the contract for the purposes of CGT Event A1 was the date the contract was entered into, and not the date of settlement.

This was the first time you were advised that the CGT event had occurred in the earlier income year and, as such, the latest date to make the choice to apply the retirement exemption under the SBCGT concessions had passed.

You are over the age of 55.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 103-25

Income Tax Assessment Act 1997 section 152-205

Income Tax Assessment Act 1997 section 152-220

Income Tax Assessment Act 1997 section 152-305