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Edited version of private advice
Authorisation Number: 1051886158671
Date of advice: 17 August 2021
Ruling
Subject: Deceased estate - small business concessions
Question 1
Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time, in relation to the disposal of Property A?
Answer
Yes. Having considered the relevant circumstances, the Commissioner will exercise his discretion and extend the time period.
Question 2
Will the Commissioner exercise his discretion under subsection 152-80(3) of the ITAA 1997 and allow an extension of time, in relation to the interest in Property B that the deceased acquired post-CGT (being the workshop)?
Answer
Yes. Having considered the relevant circumstances, the Commissioner will exercise his discretion and extend the time period.
This ruling applies for the following period:
Year ending 30 June 2022
The scheme commences on:
XX XXXX 20XX
Relevant facts and circumstances
There have been significant delays in finalising the deceased's estate, due to disputes over the provisions made in the deceased's Will.
It was not until the disputes were finalised that the executors knew what was to happen to the real estate which formed part of the deceased's estate.
As a result of Court Orders, the executors need to sell the estate's remaining properties in order to distribute the estate in equal parts to the beneficiaries in accordance with the Court's direction.
The Estate's remaining properties Property A and Property B.
The deceased purchased land in Property B pre-CGT.
A workshop was built on Property B in the late 19XXs. Therefore, the workshop is a post-CGT asset as per section 108-55(2) of the ITAA 1997.
The deceased purchased Property A post-CGT.
The deceased was over the age of 55 when they died.
On the assumption the sale of the aforementioned properties would have resulted in a capital gain, the deceased would have met the basic conditions for the small business concessions contained in Subdivision 152-A of the ITAA 1997.
A real estate agent has been formally appointed to sell the properties and the photographs and marketing material have been prepared.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-80