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Edited version of private advice
Authorisation Number: 1052372129523
Date of advice: 14 March 2025
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the 2-year time limit in paragraph 152-80(1)(d) of the ITAA 1997 for the deceased's' legal personal representative to dispose of the CGT interests in the farm and apply the 15-year exemption in section 152-10 of the ITAA 1997?
Answer 1
Yes. Subsection 152-80(3) of theITAA 1997 allows for a legal personal representative to make a request to extend the 2-year period to disregard a CGT gain under a CGT event covered by paragraph 152-80(1)(d) of theITAA 1997.
Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced in:
July 20XX
Relevant facts and circumstances
The individual owned the land for more than 15 years.
The land was used in the primary production business operated through a partnership in which the individual was a partner.
The partnership satisfied the small business entity test, being the $2 million aggregated turnover test and the small business maximum net asset test of $6 million.
The individual died in the year ended 30 June 20XX.
Immediately prior to death the individual would have been eligible to apply the small business 15-year CGT exemption to the sale of the land.
An affidavit was filed by one of the beneficiaries of the will, contesting the will. This prohibited the sale of any assets.
The legal proceedings continued until the beneficiary advised that they wished to finalise the estate and sell the land.
It was after this time that the sale process began, including appointing real estate agent.
There were significant delays due to COVID 19, as well as a widespread and devastating natural disaster in the area.
The properties were eventually put to market and sale contracts entered during the year ended 30 June 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 152-10(1)
Income Tax Assessment Act 1997 section 152-80
Income Tax Assessment Act 1997 section 152-35