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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1051238588865

Date of advice: 27 June 2017

Ruling

Subject: Capital gains tax – two year extension period and small business concessions.

Question 1

Will the Commissioner exercise the discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time until settlement date?

Answer

Yes

Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time until settlement date. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC17195 into the search bar at the top right of the page.

Question 2

Will the Commissioner exercise the discretion under subsection 152-80 of the ITAA 1997 and allow an extension of time until contract date?

Answer

Yes

Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 152-80 of the ITAA 1997 and allow an extension of time until contract date. Further information on death and small business CGT concessions generally can be found on our website ato.gov.au and entering Quick Code QC48078 into the search bar at the top right of the page.

Question 3

Will the estate be entitled to the small business active asset reduction and the retirement exemption?

Answer

Yes

The deceased’s assets would have qualified for the small business CGT concessions if the deceased had disposed of the assets immediately before his death. The concessions the deceased qualified for are the 15-year exemption and the 50% active asset reduction. To qualify for these conditions, the deceased satisfied these conditions by:

As the deceased qualified for the small business 15-year exemption, the beneficiaries can entirely disregard the capital gain and do not need to apply any other concessions.

Therefore the beneficiary of the deceased estate will be eligible for the small business CGT concessions.

Further information on the relevant factors and death and small business CGT concessions generally can be found on our website ato.gov.au and entering Quick Code QC48078 into the search bar at the top right of the page.

This ruling applies for the following period:

30 June 20ZZ

The scheme commences on:

1 July 20XY

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 in 20XX.

The deceased owned property pre-CGT (parcel A) totalling more than 2 hectares. The deceased’s main residence is included in parcel A.

The deceased owned property post-CGT (parcel B) totalling more than 2 hectares.

The location of the property is in a remote area.

The deceased had continual ownership of the assets for more than 15 years.

The deceased appointed a sole beneficiary and a sole executor.

The executor cares for the beneficiary and attempted to administer the estate as soon as practicable.

Parcels A and B were leased before the deceased’s date of death and the business continued (post date of death) until sold.

Parcel A had a contract of sale in 20XY and settled in 20XY.

Parcel B was under a government agreement and was bound by this agreement and could not be sold separately.

Parcel B had a contract of sale in 20YY and settled in 20YY.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 104-10,

Income Tax Assessment Act 1997 section 118-195

Income Tax Assessment Act 1997 subsection 118-195(1).

Income Tax Assessment Act 1997 Section 152-80.

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