Private ruling: Income tax - capital gains tax - extension of time to make a choice
Date of advice: 10 September 2020
Published: October 2020
Ruling period: Year ending 30 June 2021 | Year ending 30 June 2020 | Year ending 30 June 2019 | Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise discretion under section 103-25(1)(b) of the Income Tox Assessment Act 1997 (ITAA 1997) to allow you, an extension of time to make a choice to apply the 50% reduction and the retirement exemption contained in Division 152 of the ITAA 1997? | A1: There would be no prejudice to the ATO by allowing the extension. 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 XXX to make a valid choice to apply the small business CGT concessions.

Relevant facts and circumstances: The Taxpayers transferred the property to their son on XX May 201XX (the contract date). A capital gain from a CGT Event A1 was made on the disposal of the property. Due to the fault of the Taxpayers' lawyer in failing to inform the tax agent of the occurrence of the transfer, this capital gain was not included in the Taxpayers 20XX income tax returns. A choice to apply the small business CGT concessions has not been made. The Property was an active asset and the Taxpayers were eligible to apply the small business concessions to the capital gain made from the disposal of the property. The Taxpayers have made a voluntary disclosure to the Commissioner in relation to the failure to include the capital gain - even though no amended assessment has been issued by the Commissioner.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 103-25(1)(b) | Income Tax Assessment Act 1997 section 118-110(1)