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Edited version of private advice
Authorisation Number: 1051791142838
Date of advice: 13 January 2021
Ruling
Subject: Capital gains tax - small business concessions - deceased estate - commissioner's discretion
Question
Will the Commissioner exercise his 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 50% exemption and the retirement exemption to be applied?
Answer
Yes.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The property was acquired on XX October 19XX. (after the commencement of the capital gains provisions)
You and your spouse co-owned the property.
Your spouse established a vineyard at the property.
Your spouse passed away on XX November 20XX
Your spouse was over 55 years of age at the date of death.
You inherited the farmland from your late spouse.
You were XX years of age when your spouse passed away and your health was failing. You were not capable of running the business on your own. You wanted to sell up quickly to move to be closer to family.
Between 20XX and 20XX, you listed the property for sale with multiple real estate agents with no success of finding a buyer.
In April 20XX, the XX council advised that there would be a compulsory acquisition to portion of the farmland.
The portion of farmland compulsory acquired by the XX council vested in July 20XX.
The most recent real estate agent was successful in locating a purchaser and as such, a contract of sale in December 20XX was signed.
As at the date of death of the deceased, the deceased met the conditions to benefit from the small business relief under Division 152 of the ITAA 1997 as the land owned by the deceased had been an active business asset for at least 7.5 years during the period of ownership by the deceased and the total assets of the deceased at the date of death were less than $6,000,000
Relevant legislative provisions
Income Tax Assessment Act 1997 Division 152
Income Tax Assessment Act 1997 Subsection 152-80
Income Tax Assessment Act 1997 Subsection 152-80(3)
Income Tax Assessment Act 1997 Subdivision 152-C
Income Tax Assessment Act 1997 Subdivision 152-D