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Edited version of private advice
Authorisation Number: 1052054520657
Date of advice: 10 November 2022
Ruling
Subject: Commissioner's discretion - small business concessions
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 sale of the water access licences (WALs)?
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 in relation to the WALs to financial year ended 30 June 2022.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away over two years ago.
The deceased inherited an ownership interest in a Property as well as interests in Water Access Licences (WALs) over the Property. The Property and the WALs were used in a primary production business conducted on the Property by the Deceased in Partnership with his sibling. Upon the deceased's death, the Deceased's interests in the WALs formed part of his Estate.
Pursuant to the Will of the Deceased, the Deceased's interest in the Partnership, including his interest in the WALs was to be transferred to his children.
Following the Deceased's death, a legal dispute arose between the Deceased's brothers and the Deceased's children. A Deed of Family Arrangement dated mid October 20XX was signed by the parties.
The Deed of Family Arrangement provided that all of the WALS owned by the Deceased were to be partitioned, transferred, and sold by the Deceased's children. Pursuant to the Deed of Family Arrangement, the Deceased's sibling would be given the opportunity to purchase the WALs.
There were further delays in relation to the partitioning, transfer and sale of the WALs by the deceased children in 20XX and 20XX. There was an extensive delay in locating and obtaining the WAL deeds as well as disputes between the parties over the valuation of the WALs. Partition and transfer of the WALs was completed in mid-20XX.
The Deceased's sibling declined to purchase the WALs. The Deceased's children promptly placed the WALs on the market and sold the WALs in late 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Division 152
Income Tax Assessment Act 1997 Section 152-80