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Edited version of private advice
Authorisation Number: 1052056450476
Date of advice: 15 November 2022
Ruling
Subject: CGT - deceased estate
Question
Will the Commissioner exercise discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two-year time limit, to apply small business relief to the disposal of the property?
Answer
Yes.
Having considered the circumstances and relevant facts, the Commissioner will exercise discretion under subsection 152-80(3) of the ITAA 1997 to extend the two-year period to XX November 20XX.
Further issues for you to consider
This ruling has not fully considered the Deceased's satisfaction of the basic conditions to apply the CGT small business concessions and has only addressed the requirements under subsection 152-80(3) of the ITAA 1997. You should ensure that the Deceased would have met the basic conditions under section 152-10 of the ITAA 1997. Further information can be found at ato.gov.au by searching QC 22655.
This ruling applies for the following periods:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The Deceased conducted a primary production operation on the Property (Property 1).
The Deceased and the Deceased's children each held an 50% ownership.
A separate farming property (Property 2), jointly owned by the Deceased and the Deceased's children entered into a share agreement.
The Deceased died in October 20XX, leaving their children as Executors of their Will.
Property 1 was sold in September 20XX.
Property 2 was sold in November 20XX.
Following the Deceased's death, the share farmers continued to reside on Property 2 and continued to conduct their farming operation, despite instructions to cease operations and vacate the property.
The share farmers commenced legal action.
The claim remains unresolved.
Amongst, the legal action, significant delays were experienced due to the impact of COVID-19 by not allowing the estate's representatives to prepare Property 1 and Property 2 for sale.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 152-80(3)