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Edited version of private advice
Authorisation Number: 1051592502803
Date of advice: 9 October 2019
Ruling
Subject: Capital gains tax and deceased estate
Question
Will the Commissioner exercise his discretion in subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time to enable the small business capital gains tax (CGT) concessions to be applied to the interest in the land acquired by the deceased in 19XX?
Answer
Yes.
Having considered your circumstances and the relevant factors the Commissioner considers it appropriate to grant an extension of time. Further information can be found by searching 'QC 18383' on ato.gov.au
This ruling applies for the following period
Year ending 30 June 2019
The scheme commenced on
1 July 2018
Relevant facts
The deceased and their late spouse acquired farming land prior to 20 September 1985. (The properties)
The properties were used to operate a farming business.
The deceased inherited their late spouses' interest in the properties in 19XX.
The deceased passed away in 20XX.
The properties continued to be used as a farming business by a number of the beneficiaries of the deceased.
The deceased would have satisfied the basic conditions for the small business CGT concessions just before their death.
The value of the properties is less than $6 Million and the aggregated annual turnover is less than $2 Million.
A dispute ensued between the deceased's children who are all beneficiaries of the deceased. The dispute mainly concerned valuation of the properties and whether a number of the children would purchase the properties from the other beneficiaries.
The local property market experienced a downturn and it was difficult to find a purchaser for the properties.
The dispute was resolved and the properties were listed for sale.
The property was sold in 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 152-80
Further information
Taxation Ruling IT 2622
In your case, the administration of the deceased estate is currently ready for completion, i.e., complete.
The properties have been sold and the net income of the estate if available for distribution.
It follows that the beneficiaries of the deceased estate will be presently entitled beneficiaries for the year ended 30 June 20XX and must include their share of the net income of the estate in their personal tax returns.