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Edited version of private advice
Authorisation Number: 1051644764055
Date of advice: 16 March 2020
Ruling
Subject: Commissioner's discretion - deceased estate - two year limit
Question 1
Will the Commissioner allow an extension of time to xx xxxx xxxx for you to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal?
Answer
Yes.
Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au
Question 2
Will the Commissioner allow an extension of time for the assets to be disposed of until xx xxxx xxxx so that the small business capital gains tax concessions can be applied?
Answer
Yes.
Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52292' on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
The deceased passed away on xx xxx xx. You are a beneficiary of the estate.
The deceased owned a property. The deceased and spouse had purchased the property during the 1970's and subsequently they built their main residence on the land and commenced living there in 19xx.
The property consisted of xx hectares including the area for the main residence. The remaining land was used for cattle grazing as the deceased and spouse had significant farming interests elsewhere.
The deceased's spouse passed away on xx xxx xx and bequeathed their interest in the property to the deceased.
After the deceased's spouse passed, the deceased continued to operate the farming business through a Company in which the deceased held xxxx shares and one other shareholder held xxx share. Young cattle were brought down from the larger property to fatten on the hectares surrounding the dwelling.
Due to their age and declining health the deceased moved into an aged care facility. The deceased continued to treat the dwelling as their main residence for the entire period they resided in the aged care facility until passing. The family continued to reside in the house until 20xx.
The business continued to operate via the company for the whole time the deceased was in the aged care facility.
To assist with the holding costs of the property it was rented out from 20xx until August 20xx.
During the period following the death in 20xx until the property was eventually transferred into the names of the beneficiaries there was an ongoing legal dispute between the sole executor of the property and the beneficiaries.
The property was rented during the period the executor was seeking legal advice and the tenants did not vacate the property until xx xxx xx.
After receiving title to the property the beneficiaries immediately began preparations to sell the property. The marketing process for the sale commenced in xx xxx but due to the state of the market no sale occurred at auction.
In xx xxx a contract was signed with settlement occurring on xx xxx xx
Relevant legislative provisions
Income Tax Assessment Act 1997 - Subsection 118-195(1) and
Income Tax Assessment Act 1997 - Subsection 152-80(3).