Edited version of private advice

Authorisation Number: 1051921098365

Date of advice: 12 November 2021

Ruling

Subject: CGT - small business concessions

Question

Will the Commissioner exercise discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) in relation to the sale of the property?

Answer

Yes. Having considered the circumstances and factors, the Commissioner will exercise discretion under subsection 152-80(3) of ITAA 1997 and extend the two-year period to XX XXX XX. For further information on death and the CGT small business concessions visit ato.gov.au and search for 'QC 52292'.

Further Information to Consider

We rule on the question raised and the facts provided upon application. This ruling is limited to the question requesting an extension of the two-year period under subsection 152-80(3) of the ITAA 1997 and on the assumption that you are entitled to Small Business CGT Concessions under Division 152 of the ITAA 1997. The Commissioner has not considered whether you are in fact entitled to any Small Business CGT Concessions nor does this ruling address your eligibility. For further information regarding Small Business CGT Concession, visit ato.gov.au and search for 'QC 22165'.

This ruling applies for the following period:

Year ended 30 June XXXX

The scheme commences on:

1 July XXXX

Relevant facts and circumstances

A & B are the beneficiaries of a deceased estate. The deceased passed away more than two years ago.

The deceased acquired the three titles ('The Property) of farming land before 20 September 1985.

No residence exists on any of the titles.

The deceased operated a business through a partnership on the property and would have been eligible to apply the small business capital gains concessions prior to death.

The deceased died on XX XXX XX.

The deceased died leaving a Will dated XX XXX XX.

Probate was granted to the Executor of the Estate on XX XXX XX.

The deceased's Will included provisions regarding 'The Property'. These provisions provided that the deceased's foster son was given the right to use 'The Property' until XX XXX XX.

Since the date of death, 'The Property' has continued to be used in business.

The provision prevented the beneficiaries from selling or taking action to sell the property prior them turning 30 and subject to them both paying legacies of $XXXXX to each of the deceased's other grandchildren (In the end this being X grandchildren).

The legacies were paid within six months and were satisfied on XX XXX XX and 'The Estate' transferred 'The Property' to the beneficiaries in accordance with the terms of the Will.

Immediate arrangements to sell 'The Property' were put in place.

A contract of sale was entered into on XX XXX XX.

'The Property' settled on XX XXX XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 152-80(3)