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This edited version has been archived due to the length of time since original publication.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.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012575610412

Ruling

Subject: CGT small business concessions

Question

Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to allow the small business capital gains tax (CGT) concessions to be applied?

Answer

Yes

This ruling applies for the following period:

Year ending 30 June 2014

The scheme commenced on:

1 July 2013

Relevant facts and circumstances

The deceased operated a business as a sole trader and also derived income from rental properties.

The deceased was a small business entity.

The estate properties were placed on the market at a time that the real estate market was depressed. A number of estate properties were sold in the 2011-12 and 2012-13 financial years.

The final property was sold more than two years after the deceased's death. This property was land that was used in the deceased's business.

The deceased would have been entitled to apply the small business concessions to the capital gain that arose from the sale of the land if they had disposed of the property just prior to their death.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 152-80

Income Tax Assessment Act 1997 Subsection 152-80(3)

Reasons for decision

Section 152-80 of the ITAA 1997 allows either the legal personal representative of an estate or the beneficiary to apply the small business CGT concessions in respect of the sale of the deceased's asset in certain circumstances.

Specifically, the following conditions must be met:

    · the asset devolves to the legal personal representative or passes to a beneficiary

    · the deceased would have been able to apply the small business concessions themselves if they had disposed of the asset immediately prior to their death, and

    · a CGT event happens within 2 years of the deceased's death unless the Commissioner extends the time period in accordance with subsection 152-80(3) of the ITAA 1997.

In determining whether the discretion to allow further time would be exercised, the Commissioner has considered the following factors:

    · 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 wider public interest

    · whether any mischief is involved, and

    · consequences of the decision.

In this case, we consider that a reasonable explanation for the delay in the disposal of the land has been provided. Unfavourable market conditions impacted the sale of the land. We do not consider that allowing this request would cause the unsettling of others or that there is any mischief involved.

Accordingly, the Commissioner will exercise his discretion under subsection 152-80(3) of the ITAA 1997 to extend the time period.


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