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Edited version of private advice
Authorisation Number: 1051593870573
Date of advice: 14 October 2019
Ruling
Subject: Small business retirement exemption
Question
Will the Commissioner allow you further time as provided in paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 for you to make a choice to utilise the small business capital gains tax (CGT) concessions to the CGT event that arose?
Answer
Yes.
You did not make a valid choice at the time you lodged the relevant income tax return. Having considered your circumstances and the relevant factors the Commissioner considers it reasonable to grant a short extension of time to make a choice to utilise the small business CGT concessions.
This ruling applies for the following period:
Year ended 30 June 20xx
The scheme commences on:
1 July 20xx
Relevant facts and circumstances
You sold the property that you used in your business and made a capital gain. You conducted your business operations in this property for the entire ownership period.
You continued to trade in rented premises after the sale of the property.
The business has an aggregated turnover of below $XXX.
The company shareholders, both aged above 55 years, hold equal number of shares. The shares carry voting rights and entitlement to dividends.
You do not have any other affiliates or other connected entities.
You and the shareholders engaged the services of an accountant in lodging your tax returns.
Due to unforeseen staff circumstances, the firm has accumulated significant backlog on tax lodgements and other accounting responsibilities.
Your accountant requested for an extension of time to lodge your returns.
Upon checking the shareholders' notices of assessments, the accountant realised an oversight and immediately notified the shareholders of this mistake the following day.
The accountant failed to advise you on the application of the small business retirement exemption. You were only made aware of this concession from the late advice given. Consequently, you did not make a choice to disregard all of the capital gain you made from the sale of the property.
Following the advice, you wish to elect to utilise the small business CGT concessions.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 103-25
Income Tax Assessment Act 1997 Part 3-1
Income Tax Assessment Act 1997 Part 3-3