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Edited version of private advice
Authorisation Number: 1052194595907
Date of advice: 30 November 2023
Ruling
Subject: Commissioner's discretion - deceased estates
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 2022-23 financial year and allow the small business Capital Gains Tax (CGT) concessions to be applied on the disposal of the property?
Answer
Yes. Having considered your circumstances and the relevant factors, including the spouse being granted a life interest in the property which would have prevented the Estate from selling the property until the spouse's death or upon their agreement to sell and surrender their life interest, there were no conditions specified in the Will that required the spouse to reside at the property to maintain their life interest, and the determining factor for the sale was due to the loss of income from their pension, the Commissioner will exercise the discretion to extend the time limit for the disposal of the property.
This ruling applies for the following period:
Period ending June 20XX
The scheme commenced on:
November 20XX
Relevant facts and circumstances
The deceased acquired the property on XX month 19XX. The property is made up of two titles - Title A and Title B.
The property was used for a farming business carried on by the deceased and his child.
The deceased passed away in 20XX.
At the time of passing the deceased would have been eligible for the 15-year exemption.
The deceased granted a life interest in the farming property to his spouse.
The spouse resided at the property for 1 year after the deceased death, then due to illness was required to move into alternative care.
The property was farmed on after deceased passed and until the date of sale.
In 20XX Title A for the property was sold.
One year prior to the sale of the property the deceased's spouse stopped being eligible for Government support payments.
Following the deceased's spouse losing their government support payment, the parties of the estate agreed that the property was to be sold and the funds invested to cover the spouse's living expenses.
Communication with the deceased's spouse was restricted due to COVID-19 lockdown restrictions.
In 20XX Title B of the property was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-80