Private ruling: CGT - Small business concessions - deceased estate - extension of time
Date of advice: 19 November 2020
Published: January 2021
Ruling period: Financial year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time until 30 June 2020 to allow the small business capital gains tax (CGT) concessions to be applied in relation to disposal of the property at XX? | A1: 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. Further information on death and the small business CGT concessions can be found on our website, ato.gov.au by searching quick code QC52292.

Relevant facts and circumstances: The deceased acquired the land, known as XX (the property), on XX XX 20XX. A company, XX (the company), which operates a XX business at XX, was established on XX XX 20XX. The deceased held 100% of the issued shares in the company. The property, being adjacent to XX, was utilised as part of the XX operations by the company. The company continued to utilise the property until the death of the deceased on XX XX 20XX. The deceased was over 55 years of age at the time of passing. The deceased's parent, XX years of age, was the sole beneficiary of the late estate. After the deceased's death, the estate began an effort to sell its assets, including the property. The deceased's children were not satisfied with the terms of the Will, and a Deed of Family Arrangement was signed on XX XX 20XX whereby the deceased's parent relinquished their entitlement as sole beneficiary in favour of the deceased's children. The property was put up for sale in XX 20XX. Another Deed of Arrangement was signed in XX 20XX. The property remained for sale based on the Deed of Arrangement. A sale contract for the property was entered in XX 20XX, and settlement occurred in XX 20XX. The deceased would have been entitled to reduce or disregard the capital gain if the event of disposal in relation to the property happened immediately before the death.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-80 | Income Tax Assessment Act 1997 subsection 152-80(3)