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Edited version of private advice
Authorisation Number: 1052141278691
Date of advice: 21 July 2023
Ruling
Subject: Small business concession - extension of time
Question
Will the Commissioner extend the time limit in paragraph 152-125(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to DD MM YYYY in accordance with subsection 152-125(4) of the ITAA 1997, for payment of the exempt amount to the capital gains tax (CGT) concession holder?
Answer
Yes. After considering your facts and circumstances the Commissioner will allow an extension of time. Further information on small business CGT concessions can be found on our website, ato.gov.au by searching Quick Code QC 52288.
This ruling applies for the following periods:
Year ending 30 June 2022
Year ending 30 June 2023
Year ending 30 June 2024
Year ending 30 June 2025
Year ending 30 June 2026
The scheme commenced on:
1 July 2021
Relevant facts and circumstances
The company has been running a business for over 15 years.
In the period year ending 30 June 2022 the company sold an asset to another business with a vendor finance arrangement in place for over 3 years.
The finance arrangement consists of XX monthly payments with the final payment being made on the DD MM YYYY.
Due to the time frame for the vendor finance agreement the company will not receive all funds from the sale of the asset before the end of the current two-year time frame. (After the CGT event occurred) for distributions to be made to the CGT concession stakeholder.
The company has a sole director and shareholder
The company is eligible for the 15-year exemption on this sale.
Further issues for you to consider
This ruling has not fully considered the company's eligibility for the small business concessions; it has only addressed an extension of time to pay an exempt amount under subsection 152-125(4) of the ITAA 1997. The company should ensure it satisfies the basic conditions and the other relevant conditions for the exemption. More information on small business CGT concessions is available on our website ato.gov.au.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-110
Income Tax Assessment Act 1997 subsection 152-125(1)
Income Tax Assessment Act 1997 paragraph 152-125(1)(b)
Income Tax Assessment Act 1997 subsection 152-125(2)
Income Tax Assessment Act 1997 subsection 152-125(4)
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