Edited version of private advice

Authorisation Number: 1051908353029

Date of advice: 9 October 2021

Ruling

Subject: 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) to extend the time limit to allow the small business capital gains tax concessions to be applied in relation to the Farmland?

Answer

Yes. Having considered your circumstances and the relevant factors, the Commissioner will exercise the discretion under subsection 152-80(3) of the ITAA 1997 and allow an extension of time to XXXX.

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.

Note: We have limited our ruling to the question raised in your application being whether an extension of time will be granted. You advised that the deceased would have been entitled to apply the small business CGT concessions on their property before passing away. The private ruling on whether an extension of time will be granted was issued on this basis, that is, the Commissioner did not consider whether the deceased was in fact entitled to the small business CGT concessions. More information about the concessions can be found by searching 'QC 22165' on ato.gov.au

This ruling applies for the following period:

Year ended 30 June XXXX

The scheme commences on:

1 July XXXX

Relevant facts and circumstances

The Deceased was your parent and was a farmer.

The Deceased had XXX children.

The Deceased's Estate includes farmlands in Australia

You and your sibling are the Executors / Trustees of the Deceased's Estate.

One of your sibling's was not willing to be an Executor of your parent's estate and renounced their role due to medical reasons.

Pursuant to a Deed of Family Arrangement the Farmland has passed to you and your sibling.

The sale of the Farmland was delayed due to various factors outside of trustee's control including

•         The physical distance between the trustees, the Farmland and the lawyers acting for the Deceased's Estate.

•         You and your sibling needed to prioritise assisting your sibling XXXX with special needs.

•         You were dissatisfied with the service provided by the lawyers engaged by the trustees of the Deceased Estate. The delay in drafting the Deed of Family Arrangement due to the need of seeking advice from other lawyers.

•         The unexpected death of one of the trustee's spouse.

•         Drought on the Farmland, such that it was not a good time to sell the Farm land.

•         COVID-19 pandemic resulting in border closures so the trustees could not get to the Farm land or potential buyers.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 152-80