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Edited version of your written advice
Authorisation Number: 1012827857461
Date of advice: 22 June 2015
Ruling
Subject: Small business concessions
Question 1
Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to 30 June 2016 to allow the small business capital gains tax (CGT) concessions to be applied?
Answer
Yes.
This ruling applies for the following period:
Year ending 30 June 2016
The scheme commences on:
1 July 2015
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 during the relevant financial year.
The deceased was over 55 years old when they passed away.
The deceased and their spouse own land which is used for farming.
The land has been in the deceased's family since the early 1900's. It was farmed by family until the deceased and their spouse took over from the mid-1990's.
The deceased and their spouse renewed a farm lease for use of their land prior the deceased's death. The term of the lease is three years. It is only in recent years that the farm has been leased due to the age of the deceased and their spouse.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 152-80.
Reasons for decision
Section 152-80 of the Income Tax Assessment Act 1997 (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.
We consider that you have provided a reasonable explanation for the delay in the disposal of the CGT asset. We do not consider that allowing this request would cause the unsettling of others.
Having considered the particular circumstances of your case, the Commissioner will exercise his discretion under subsection 152-80(3) of the ITAA 1997 to extend the time period to 30 June 2016.
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