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Edited version of private advice
Authorisation Number: 1051627833071
Date of advice: 20 January 2020
Ruling
Subject: Income Tax - small business concessions - extension of time for a deceased estate.
Question
Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two year time limit?
Answer
Yes. In this instance we consider that you have provided a reasonable explanation for the delay in disposal of the CGT asset. We do not consider allowing this request would cause the unsettling of others. Accordingly, the Commissioner will exercise his discretion under subsection 152-80(3) of the ITAA 1997 to extend the time period.
We have limited our ruling to the question raised in your application being whether an extension of time will be granted. You advised that the deceased would have been eligible to apply the small business CGT concessions if the deceased had disposed of the property immediately prior to their death. The private ruling on whether an extension of time will be granted was issued on this basis, that is, the Commissioner did not consider the deceased's eligibility for the small business CGT concessions. Further information about the small business CGT concessions can be found by searching for 'QC 22165' on www.ato.gov.au
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
XX November 20XX
Relevant facts and circumstances
The Deceased operated a business utilising properties A and B in a State of Australia, in a business activity.
Prior to their death the Deceased would have been eligible to utilise the Small Business CGT concessions.
The Deceased pass away in another State of Australia.
Executors were appointed.
The executors sought an assessment of the properties and engineering advice was sourced in relation to the required rectification work to correct non approved structural modifications. The rectification work was not undertaken as the cost to rectify would exceed any additional value in sales price received and would take considerable time.
In August 20XX the Executors sought quotes to engage a sales agent and appointment to sell the properties occurred and in September 20XX marketing and property inspections commenced.
In March 20XX the Executors appointed a second property specialist to manage and co-ordinate the sales process.
The relevant state Probate Court required Probate to be resealed in the relevant state; this was completed and as a result the properties could be sold.
The property A and B were settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 152-80(3)