Edited version of private advice

Authorisation Number: 1051753255403

Date of advice: 10 September 2020

Ruling

Subject: Income tax - capital gains tax - extension of time to make a choice

Question

Will the Commissioner exercise discretion under section 103-25(1)(b) of the Income Tox Assessment Act 1997 (ITAA 1997) to allow you, an extension of time to make a choice to apply the 50% reduction and the retirement exemption contained in Division 152 of the ITAA 1997?

Answer

There would be no prejudice to the ATO by allowing the extension. There is no mischief involved. The Commissioner considers it fair and equitable in these circumstances for an extension to be allowed. The Commissioner has granted until XXX to make a valid choice to apply the small business CGT concessions.

This ruling applies for the following periods:

Year ending 30 June 2021

Year ending 30 June 2020

Year ending 30 June 2019

Year ended 30 June 2018

The scheme commences on:

1 July 2017

Relevant facts and circumstances

The Taxpayers transferred the property to their son on XX May 201XX (the contract date).

A capital gain from a CGT Event A1 was made on the disposal of the property.

Due to the fault of the Taxpayers' lawyer in failing to inform the tax agent of the occurrence of the transfer, this capital gain was not included in the Taxpayers 20XX income tax returns. A choice to apply the small business CGT concessions has not been made.

The Property was an active asset and the Taxpayers were eligible to apply the small business concessions to the capital gain made from the disposal of the property.

The Taxpayers have made a voluntary disclosure to the Commissioner in relation to the failure to include the capital gain - even though no amended assessment has been issued by the Commissioner.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 103-25(1)(b)

Income Tax Assessment Act 1997 section 118-110(1)