Edited version of private advice

Authorisation Number: 5010069366776

Date of advice: 29 June 2020

Ruling

Subject: Extension of the two year rule for the small business capital gains tax concessions

Question

Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to xx February 20xx for the disposal of the shares?

Answer

Yes. Having considered your circumstances and the relevant factors, the Commissioner is able to apply the discretion under subsection 152-80(3) of the ITAA 1997 and allow an extension of time to xx February 20xx for the disposal of the shares.

This ruling applies for the following period:

Year ending 20xx

The scheme commences on:

1 July 20xx

Relevant facts and circumstances

The deceased died on xx September 20xx.

At his date of death he owned 50% of the issued shares of a company. The deceased was actively involved in running this company till his date of death.

The deceased had three wives with children from all wives. His Will was contested by two of his daughters.

The shares were an active asset and would qualify for the small business capital gains tax (CGT) concessions.

The shares were disposed off on xx February 20xx.

There were protractred negotiations with the purchaser who controlled the remaining 50% of the company.

Tax agent has advised that the deceased would have also qualified for the small business CGT concessions if the shares had been sold just prior to his death. Tax agent also advised that the shares were an active asset and the maximum net asset values were not exceeded.

Relevant legislative provisions

Subsection 152-80(3) of the Income Tax Assessment Act 1997