Edited version of private advice

Authorisation Number: 1051895410242

Date of advice: 4 September 2021

Ruling

Subject: CGT - small business concessions

Question

Will the Commissioners Discretion be exercised under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997)to extend the time limit to allow the small business capital gains tax (CGT) concessions to be applied until 30 June 20XX?

Answer

Yes.

Section 152-80 of the ITAA 1997, allows the Legal Personal Representative or Beneficiary of the deceased estate to apply the small business CGT concessions where the asset would have qualified for the small business CGT concessions if the deceased disposed of the asset immediately before their death and the asset is disposed of within two years of the deceased's death. Subsection 152-80(3) of the ITAA 1997 allows the Commissioner to grant an extension of time to the two year period. After considering the circumstances of the delay in disposal, the Commissioner will allow the extension of time to 30 June 20XX. 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 period:

Year ending 30 June 20XX

The scheme commences on:

XX XXX XX

Relevant facts and circumstances

The deceased (the Deceased) died on XX July 20XX.

The Deceased died leaving a Will dated XX August 20XX.

Probate was granted to the Executors on XX June 20XX.

The beneficiaries were unable to agree on the distribution of the assets. The assets of the estate were subject to a claim in the Supreme Court.

On XX November 20XX, the claim was commenced by way of summons and the Statement of Claim received at the Supreme Court.

In January 20XX, the farm was impacted by a natural disaster resulting in severe damage. Repairs were required to prepare the property for sale, the majority of which has now been completed.

In February 20XX, a resolution was agreed in principle between the parties.

On X June 20XX, a deed (the Deed) was signed confirming the particulars and the claim resolved. The Executors of the estate have now distributed the assets to the beneficiaries.

You are one of the beneficiaries of the estate.

You intend to sell your block of land.

The Deceased operated a business on the property prior to their death.

The Deceased acquired the land after 20 September 1985 and would have been eligible to apply the small business capital gains concessions prior to death.

Since date of death, the land has been used for agistment purposes and is now vacant.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 152-80