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Ruling
Subject: Capital gains tax
Question
Will the Commissioner extend the 2 year time limit under paragraph 152-180(3) of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
This ruling applies for the following period:
Year ended 30 June 2011
The scheme commences on:
1 July 2010
Relevant facts and circumstances
Your spouse purchased a CGT asset.
You and your spouse operated a business in partnership until their death.
After your spouse's death, you leased out the CGT asset up until you sold it
You had begun trying to sell the asset through a Board, but were not able to find a buyer. You eventually sold the asset via a private sale.
Your spouse would have been able to apply the small business concessions if a CGT event had happened in relation to the CGT asset immediately before their death.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 150-80(3).
Reasons for decision
According to the Advance guide to capital gains tax concessions for small business 2010-11, if you are a beneficiary of a deceased estate you may be eligible for the concessions to the same extent that the deceased would have been just prior to their death.
You will be eligible for the concessions where the CGT event happens within two years of the individual's death. The active asset test applies to you for any capital gain made on a sale of the assets after the two year time limit. This means that if you do not continue to carry on the deceased's business, or use the asset in another business, after the two year time period the active asset test may not be satisfied and the small business concessions may not be available.
However, in appropriate circumstances, the Commissioner may extend this two year period. The abovementioned guide also provides the relevant considerations applied by the Commissioner to extend the two year period.
Having regards to your full circumstances and the above principles, the Commissioner will allow an extension of time until 30 November 2010.