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Edited version of private advice
Authorisation Number: 1051789475542
Date of advice: 10 December 2020
Ruling
Subject: Capital gains tax and deceased estates
Question
Will the Commissioner exercise the discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to allow the small business CGT concessions to be applied in relation to the winding up of the Company?
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 until the Company is wound up.
Further information on the small business CGT concessions and how they apply when someone has passed away can be found on our website: ato.gov.au by searching quick code QC52292.
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
XXXX held XX percent shareholding in the Company.
The company sold its business assets in XX/XXXX including inventory, plant and equipment and goodwill.
The company retained its commercial premises and leased it out.
XXXX passed away on XX/XX/XXXX and his shares in the company passed to his estate.
An application for probate was filed in XX/XXXX.
The beneficiaries then lodged a caveat against the probate application which they sought to be lifted in XX/XXXX.
An amended grant of probate was filed in XX/XXXX.
Probate issued on XX/XX/XXXX.
The commercial property was listed for sale and was sold in XX/XXXX.
The shareholders and directors then proceeded to commence the wind-up of the company with the aim to distribute the surplus assets to the shareholders.
There was a challenge to the estate by a former partner initiated XX/XX/XXXX.
The executor was prohibited from dealing with the estate's assets including the shares in the company whilst it was subject to a claim.
The claim was scheduled to be heard on XX/XX/XXXX and has only recently been settled.
The process for winding up the company has now begun and is expected to be finalised in XX/XXXX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-80
Income Tax Assessment Act 1997 subsection 152-80(3)