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Edited version of your private ruling
Authorisation Number: 1012524932681
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Ruling
Subject: CGT - small business concessions
Question Disclaimer
Will the Commissioner exercise his discretion under paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you an extension of time to make a choice to apply the small business retirement exemption?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts and circumstances
You own a property.
During the 20XX year an easement was resumed on your property.
Capital proceeds from the easement were received in the 20XX financial year.
When your tax agent prepared your 20XX returns he/she was unaware of the easement.
You were unaware that a capital gains tax event had occurred in the 20XX year as the proceeds were not received until the 20XX year.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 103-25.
Reasons for decision
According to the Advance guide to capital gains tax concessions for small business 2011-12, the retirement exemption does not require amounts to be contributed into a complying superannuation fund or a retirement savings account if the recipient is older than 55 years old when they make a choice to use the retirement exemption.
Generally, a choice available under the CGT law must be made by the day you lodge your income tax return for the income year in which the relevant CGT event happened, or within such further time as the Commissioner allows.
ATO ID 2003/102 provides that the Commissioner will consider the following factors when determining whether or not to exercise his discretion:
· 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 wide public interest
· whether any mischief is involved, and
· the consequences of the decision
Having regards to your full circumstances and the above principles, the Commissioner will grant you an extension until Month 20XX to the make the choice to use the small business retirement exemption and to make the required contribution to an eligible superannuation fund.