Private ruling: CGT - small business concessions - extension of time
Date of advice: 16 December 2020
Published: March 2021
Ruling period: 30 June 20XX | 30 June 20XX | 30 June 20XX | 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can the company be granted an extension of time to choose to apply the Small Business Capital Gains Tax concessions documentation for a CGT event in the 20XX financial year? | A1: Yes. You did not make a valid choice at the time you lodged your year ending 30 June 20XX income tax return. There is no mischief involved. The Commissioner considers it fair and equitable in these circumstances for an extension to be allowed. The Commissioner has granted until XX/XX/XXXX to make a valid choice to apply the small business CGT concessions. Further information on making choices and requesting extensions of time can be found on our website, ato.gov.au by searching quick code Q18383. Note: We have limited our ruling to the question raised in your application being whether an extension of time will be granted. You advised that the company would have been entitled to the small business CGT concessions. The private ruling on whether an extension of time will be granted was issued on this basis, that is, the Commissioner did not consider whether the company was in fact entitled to the small business CGT concessions. More information about the concessions can be found by searching 'QC 22165' on ato.gov.au

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. The taxpayer is an Australian Private Company. The company had a CGT event straddling the 20XX and 20XX financial years, resulting in a capital gain. The capital gain of $X was for the sale of goodwill. The gain was not reported in the tax return in the 20XX financial year due to confusion on the signing date on the Contract of Sale. The contract signing date has now been ascertained as XX/XX/XXXX. The contract settled on XX/XX/XXXX. The company has on issue X shares that are owned by an individual Australian tax resident. You have stated that the company and the sale of goodwill satisfy the basic conditions to be considered eligible for the Small Business Capital Gains Tax.

Relevant legislative provisions: Income Tax Assessment Act 1997 paragraph103-25(1)(b)