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Edited version of private advice
Authorisation Number: 1051945610865
Date of advice: 3 February 2022
Ruling
Subject: 15 year exemption - deceased estate - extension of time
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 15 year exemption to be applied on the sale of the Property?
Answer
Yes. Had the deceased disposed of the Property prior to their death, they would have had access to the small business 15 year exemption in relation to the Property.
Having considered the facts and circumstances of the sale of the Property, the Commissioner will exercise the discretion under subsection 152-80(3) of the ITAA 1997 and extend the two year period in which you can access the small business 15 year exemption to XX/XX/XXXX.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased owned a property acquired post-CGT upon which they operated a primary production business (Property). You held an interest in the Property under a joint tenancy. The property was owned for over 15 years and the primary production business was operated on the property for over 7.5 years.
Prior to the deceased's passing, you and the deceased engaged property agents to market and sell the Property however due to significant allowable use restrictions imposed by local council you were unable to dispose of the Property prior to the deceased's passing.
Upon the deceased's passing, their 50% interest in the Property passed to you under the rules of survivorship. You have since continued to experience significant difficulties in selling the Property and have been unable to find a commercial primary production activity suitable for the land that would enable its sale.
A contract of sale of the Property was entered into on XX/XX/XXXX and has subsequently settled.
The deceased would have been eligible for the small business 15 year exemption in relation to their post-CGT interest in the Property had it been sold just prior to their death.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 section 152-40
Income Tax Assessment Act 1997 section 152-80
Income Tax Assessment Act 1997 subsection 152-80(3)
Income Tax Assessment Act 1997 section 152-105