Private ruling: Capital gains tax - small business concessions - Commissioner's discretion
Date of advice: 21 April 2016
Published: June 2016
Ruling period: Year ending 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two year period? | A1: Yes.

Relevant facts and circumstances: Your spouse purchased a property in the 19XX-19XX financial year. Your spouse passed away in the 20XX-20XX financial year, Your spouse would have been entitled to access the small business 15 year exemption, prior, to their death. You inherited the property from your spouse. The sale contract was entered into in the relevant financial year. The reasons for the delay in selling in the property were: • that you suffered from health issues after your spouse died, and • the property was in an isolated area with limited buyers. The CGT event did not occur within 2 years of the deceased's date of death.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 150-80(3).

Reasons for decision: Summary: Section 152-80 of the ITAA 1997 provides that, if you are a beneficiary of a deceased estate you may be eligible for the concessions to the same extent that the deceased would have been just prior to their death. You will be eligible for the concessions where the CGT event happens within two years of the individual's death. The active asset test applies to you for any capital gain made on a sale of the assets after the two year time limit. This means that if you do not continue to carry on the deceased's business, or use the asset in another business, after the two year time period the active asset test may not be satisfied and the small business concessions may not be available. However, in appropriate circumstances, the Commissioner may extend this two year period. Having regards to your full circumstances and the above principles, the Commissioner will allow an extension of time until dd/mm/yyyy.