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Edited version of private advice
Authorisation Number: 1052098176213
Date of advice: 22 March 2023
Ruling
Subject: CGT - small business concessions
Question
Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two-year period so that the deceased estate can apply small business capital gains tax (CGT) concessions to the sale of the Property?
Answer
Yes.
After taking into consideration your relevant circumstances, including the impacts of drought, fire outbreaks and COVID-19 delaying the sale of the Property, the Commissioner will allow an extension of time.
The private ruling has been limited to the question requested upon application which is whether the Commissioner can exercise discretion under subsection 152-80(3) of the ITAA 1997 to allow an extension of the two-year period. Therefore, the Commissioner has not considered whether the Deceased was in fact entitled to 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:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The Deceased passed away 20XX over the age of 55 years.
Probate was granted in 20XX.
At the time of their death, the deceased owned a commercial farming property.
The Property was used in carrying on a farming business.
The Deceased would have had access to small business CGT concessions prior to their death.
The Estate intends to apply the small business active asset reduction and the small business retirement exemption concession to the sale of the Property.
The selling of the Property by the Estate was complicated due to the following factors:
(a) Impacts from a drought.
(b) Fire outbreaks.
(c) Government restrictions in response to COVID-19.
Contracts for the sale of the Property were exchanged in December 20XX and settled in February 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 152-80(3)