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Edited version of private advice
Authorisation Number: 1052075130313
Date of advice: 24 January 2023
Ruling
Subject: CGT - deceased estate
Question 1
Will the Commissioner exercise discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and extend the two-year period for the disposal of the Farmland?
Answer
Yes. Having considered the circumstances and relevant facts, the Commissioner will exercise discretion under subsection 152-80(3) of ITAA 1997 and extend the two-year period.
Question 2
Will the Commissioner exercise the discretion under subsection 152-80(3) of the ITAA 1997 to extend the two-year period for the disposal of the Water Entitlements?
Answer
Yes. Having considered the circumstances and relevant facts, the Commissioner will exercise discretion under subsection 152-80(3) of ITAA 1997 and extend the two-year period.
For further information on death and the CGT small business concessions visit ato.gov.au and search for 'QC 52292'.
Further Information to Consider
The private ruling has been limited to the Commissioner's exercise of the discretion under subsection 152-80(3) of the ITAA 1997 to allow an extension of the two-year period. The Commissioner has not considered whether the deceased would have met the conditions required to apply the small business CGT concessions. Further information on 'small business CGT concessions' can be found on our website by searching QC 22655.
This ruling applies for the following period:
The year ending 30 June 20XX
The year ending 30 June 20XX
The year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
Person A and Person B purchased the Farmland approximately X years ago with attached Water Entitlements.
Person B recently passed away and Person A acquired the Farmland as the surviving joint tenant.
The Farmland was used by Person A and Person B in partnership for their farming business for a period of approximately X years.
The Farmland together with the Water Entitlements were put on the market by Person A approximately X months after Person B's death.
Due to the location and nature of the Farmland there was limited demand delaying the sale until more than X years after Person B's death.
The Water Entitlements didn't sell with the Farmland as had been expected and a new buyer needed to be found for these separately. The Water Entitlements are expected to take an additional X year to sell.
Relevant legislative provisions
Income Taxation Assessment Act 1997 section 152-80