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Edited version of private advice
Authorisation Number: 1052336952542
Date of advice: 27 November 2024
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise his discretion in subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the 2 year time limit to enable the small business capital gains tax (CGT) concessions in Division 152 of ITAA 1997 to be applied in relation to the sale of the property?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time as there is evidence of an acceptable explanation for the period of extension requested, and it would be fair and equitable in the circumstances to provide the extension.
This ruling applies for the following periods:
Year ended 30 June 2022
Year ended 30 June 2023
Year ended 30 June 2024
The scheme commenced on:
1 July 2021
Relevant facts and circumstances
You were medically incapacitated from a workplace psychiatric injury which occurred during the 2016-17 financial year.
A farming property was held by one of your late parents (the Deceased) until their passing.
The property was used in a farming business until the date of the Deceased's passing. The address of the property was provided.
The beneficiaries under the Will were the children of the Deceased, in equal proportions. The children were also the executors.
During the 2020-21 financial year, a medical panel comprising of 2 psychiatrists following a referral pursuant to your state's workers compensation legislation, upgraded your psychiatric impairment, to which had previously been determined by another psychiatrist.
The panel concluded as your what you were and are suffering from. They also concluded that the psychiatric condition has stabilised and is permanent.
A contract was entered into for the sale of the property during the 2023-24 financial year.
Settlement took place during the 2023-24 financial year.
Following agreement between the siblings that they would 'buy-out' your interest in the property, were the contracts entered into and finally settled. The siblings have retained ownership in the property as a result of acquiring your interest.
The small business capital gains tax concessions would have applied if the Deceased had disposed of the property immediately before their passing.
You were not of the required health to make decisions in relate to the estate of the Deceased during the 2 year period post the Deceased's passing because of the impairment caused by this workplace injury.
Only in more recent times have you regained sufficient health to attend to the matters of the estate.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 152-80(3)