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Edited version of private advice
Authorisation Number: 1052004711711
Date of advice: 11 July 2022
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
Will the Commissioner's discretion be exercised under paragraph 118-195(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two-year time limit for the disposal of the dwelling?
Answer
Yes, having considered your circumstances and the relevant factors, the Commissioner will exercise the discretion under paragraph 118-195(1)(b) of the ITAA 1997 and allow an extension of time.
Question 2
Will the Commissioner's discretion be exercised under subsection 152-80(3) of the ITAA 1997 to extend the two-year time limit for the disposal of the farm in relation to the small business capital gains tax (CGT) concessions?
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. Some circumstances are considered outside of your control that delayed your ability to dispose the farm earlier.
Further information on 'death and small business capital gains tax (CGT) concessions' can be found on our website by searching QC 52292.
Further information for you to consider
The private ruling has been limited to the Commissioner's exercise of the discretions under paragraph 118-195(1)(b) and subsection 152-80(3) of the ITAA 1997 to allow the extension of the two-year periods. The Commissioner has not considered whether the circumstances of this case would have met other conditions of the main residence exemption or the conditions required to apply the small business CGT concessions under Subdivision 152-A of the ITAA 1997. Further information on 'small business CGT concessions' can be found on our website by searching QC 22655.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
On DD MM YYYY, the Deceased passed away.
The Deceased purchased the property before 20 September 1985 and has been the sole owner of the property.
The property was the main residence of the Deceased throughout the ownership period.
The Deceased carried on a farming business on the property until the date of death.
The probate was granted on X 20XX.
The Deceased's will appointed 3 executors who were family members of the Deceased, to the estate.
There were several health issues with the executors starting just before the Deceased passed away delaying any initial estate meetings.
The health issues are still ongoing.
There had been disputes between the executors.
The property was sold outside the two-year period.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
Income Tax Assessment Act 1997 subsection 152-80(3)