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Edited version of private advice
Authorisation Number: 1051786134186
Date of advice: 8 December 2020
Ruling
Subject: CGT - small business concessions - deceased estate
Question
Will the Commissioner exercise the discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time until 30 June 20XX to allow the small business capital gains tax (CGT) concessions to be applied in relation to disposal of the properties at XX and XX?
Answer
Yes.
Having considered your circumstances and the relevant factors, the Commissioner is able to apply the discretion under subsection 152-80(3) of the ITAA 1997 and allow an extension of time.
Further information on death and the small business CGT concessions can be found on our website, ato.gov.au by searching quick code QC52292.
This ruling applies for the following periods:
Financial year ended 30 June 20XX
Financial year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased acquired XX Road and XX Road (the properties) on XX XX 19XX and XX XX 19XX, respectively.
The deceased passed away on XX XX 20XX. The deceased was over 55 years of age at the time of passing.
XX Road was utilised for the deceased's XX business until the death of the deceased.
The deceased's main residence located at XX Road. The adjacent land of the main residence was also utilised for the deceased's XX business until the death of the deceased.
The properties were listed for sale from XX XX 20XX.
After that, the deceased's family members undertook necessary cleanings and repairs to the properties while the properties remained for sale on the market.
Despite the effort, the properties were sold in XX 20XX, after 2 years of the deceased's passing due to the severe drought and tough market conditions in the area. In addition, the properties are close to the new XX Bypass, which caused uncertainty for potential buyers.
The deceased would have been entitled to reduce or disregard the capital gain if the event of disposal in relation to the properties happened immediately before their death.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-80
Income Tax Assessment Act 1997 subsection 152-80(3)