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Edited version of private advice
Authorisation Number: 1052410990286
Date of advice: 19 June 2025
Ruling
Subject: Capital gains tax - small business concessions
Question 1
Will the Commissioner extend the time limit in paragraph 152-125(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to February 2026 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 1
Yes. Having considered the circumstances including the payment from the sale being delayed by factors outside the Company's control, the Commissioner will allow an extension of time beyond two years to February 20XX as per subsection 152-125(4) of the ITAA 1997.
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The Company was formed in 19XX and conducted its business from that time until it was sold in 20XX.
The Company sold its business in February 20XX resulting in a capital gain.
The purchase price was apportioned between the assets sold which included plant, stock, goodwill and other assets.
The parties to the contract of sale were unrelated and negotiated the sale terms at arm's length.
On settlement $xx was payable, with the balance of $xx to be paid to the Company via instalments of $xx per month but this obligation was subject to there being sufficient cash in the business to pay the amount.
The purchaser of the business has been unable to pay the full purchase price, with $xx remaining unpaid.
The purchaser has informed the Company that it expects to be able to pay the balance of the purchase price within the next X months.
Person A was the sole director and shareholder of the company.
Relevant legislative provisions
Income Tax Assessment Act 1997 paragraph 152-125(1)(b)
Income Tax Assessment Act 1997 subsection 152-125(4)
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