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Edited version of your private ruling
Authorisation Number: 1012500920181
Ruling
Subject: Capital gains tax
Question 1
Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow extra time for the beneficiaries to obtain the small business capital gains tax (CGT) concessions?
Answer
Yes, until 30 June 20XX.
This ruling applies for the following periods:
Year ending 30 June 2014
Year ending 30 June 2015
The scheme commences on:
On or after 1 July 2010
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
The deceased passed away mid 20XX.
Probate was granted early 20XX.
The deceased used property in a business.
The will stated that they assets of the estate were to be disbursed to you and your sibling.
The will was contested. The matter was resolved at mediation and terms of settlement were effective from early 20XX.
Registration of the ownership of the property has not yet taken place due to complications through the state revenue office and further disputes between the beneficiaries. The registration is expected to be completed by mid 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 152-80.
Income Tax Assessment Act 1997 Subsection 152-80(3).
Reasons for decision
Detailed reasoning
Section 152-80 of the ITAA 1997 allows either the legal personal representative of an estate or the beneficiary to apply the small business CGT concessions in respect of the sale of the deceased's asset in certain circumstances.
Specifically, the following conditions must be met:
· the asset devolves to the legal personal representative or passes to a beneficiary
· the deceased would have been able to apply the small business concessions themselves if they had disposed of the asset immediately prior to their death, and
· a CGT event happens within 2 years of the deceased's death unless the Commissioner extends the time period in accordance with subsection 152-80(3) of the ITAA 1997.
In determining whether the discretion to allow further time would be exercised, the Commissioner has considered the following factors:
· evidence of an acceptable explanation for the period of the extension requested (and whether it would be fair and equitable in the circumstances to provide such an extension)
· prejudice to the Commissioner which may result from the additional time being allowed (but the mere absence of prejudice is not enough to justify the granting of an extension)
· unsettling of people, other than the Commissioner, or of established practices
· fairness to people in like positions and the wider public interest
· whether any mischief is involved, and
· consequences of the decision.
In this case, we consider that a reasonable explanation for the delay in the disposal of the property has been provided. Delays caused by contestation of the will have impacted the property being transferred to you to be dealt with. We do not consider that allowing this request would cause the unsettling of others or that there is any mischief involved.
Accordingly, the Commissioner will exercise his discretion under subsection 152-80(3) of the ITAA 1997 to extend the time period to 30 June 20XX.
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