Private ruling: CGT small business retirement exemption - extension of time
Date of advice: 2 July 2020
Published: August 2020
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can you have an extension of time to XX/XX/XXXX to make a written choice to apply the small business retirement exemption? | A1: Yes. Generally, the way you prepare your income tax return is evidence of the making of a choice in relation to CGT. However, an exception is that a choice to apply the small business retirement exemption must be made in writing (paragraph 103-25(3)(b) of the Income Tax Assessment Act 1997) . You have yet to make a choice in writing to apply the small business retirement exemption. A choice in relation to CGT must be made by the day you lodge the relevant income tax return or within a further time allowed by the Commissioner. Having regard to your circumstances it is considered appropriate to allow you an extension of time to XX/XX/XXXX to make a written choice to apply the small business retirement exemption.

Relevant facts and circumstances: You are under 55 years of age. You had a CGT event that resulted in a capital gain amount that was to be included in your 20XX-XX income tax return. You and your tax agent contemplated applying the small business retirement exemption but were waiting until closer to the due date for lodgement for your 20XX-XX income tax return (XX/XX/XXXX) to determine whether you had the capacity to make the contribution to your superannuation fund that was required in order to choose the exemption. Your 20XX-XX income tax return was mistakenly lodged early on XX/XX/XXXX. You have not made a written choice to apply the small business retirement exemption to the capital gain. You will make a payment equal to the exempt amount into a complying superannuation fund when you make the choice to apply the retirement exemption.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 103-25 | Income Tax Assessment Act 1997 section 152-305 | Income Tax Assessment Act 1997 section 152-315