Edited version of private advice

Authorisation Number: 1052381487407

Date of advice: 07 April 2025

Ruling

Subject: CGT - small business concessions

Question 1

Will the Commissioner exercise their discretion under section 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to allow the relevant small business capital gain tax (CGT) concessions to be applied in relation to the capital gain resulting from the sale of the property?

Answer 1

Yes.

The deceased would have satisfied the basic conditions in subdivision 152-A of the ITAA 1997, if the CGT event had occurred in relation to the property immediately before their death. They were over 55 years at the time of death. Having considered the circumstances, including the reasons for the delay and the length of time outside the 2-year period of the sale occurring, it is reasonable to allow an extension of the time limit.

This ruling applies for the following period:

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The deceased was carrying on a primary production business for at least 15 years from their rural property. The deceased was the registered owner of this property.

The deceased was over the age of 55 years old when they passed away.

The business aggregated turnover was less than $2 million per annum.

The value of the deceased's assets at the date of death was less than the $6 million limit.

The property was used to produce primary production income after the date of death, then was used for agistment.

In the years leading up to the deceased's death, their health was severely impacted. The property was also impacted by a natural disaster. The deceased applied for a grant before they passed away and grant monies were received. A condition of receiving the rural assistance grant money, was that the repairs were required to be undertaken and completed. There was a delay in completing the final repairs due to the natural disasters and the lack of availability of contractors.

The executor's ability to visit the property was further restricted for a period of time due to the COVID-19 travel restrictions which prohibited them from travelling from their state to the property in another state.

There were also delays in making decisions with the beneficiary and obtaining financial advice.

The property will be listed for sale soon.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 152-10

Income Tax Assessment Act 1997 section 152-35

Income Tax Assessment Act 1997 section 152-40

Income Tax Assessment Act 1997 section 152-80

Income Tax Assessment Act 1997 section 152-105