Private ruling: Capital gains tax – two year extension period and small business concessions.
Date of advice: 27 June 2017
Published: October 2017
Ruling period: 30 June 20ZZ
Date scheme commenced: 1 July 20XY

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time until settlement date? | A1: Yes Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time until settlement date. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC17195 into the search bar at the top right of the page. | Q2: Will the Commissioner exercise the discretion under subsection 152-80 of the ITAA 1997 and allow an extension of time until contract date? | A2: Yes Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 152-80 of the ITAA 1997 and allow an extension of time until contract date. Further information on death and small business CGT concessions generally can be found on our website ato.gov.au and entering Quick Code QC48078 into the search bar at the top right of the page. | Q3: Will the estate be entitled to the small business active asset reduction and the retirement exemption? | A3: Yes The deceased’s assets would have qualified for the small business CGT concessions if the deceased had disposed of the assets immediately before his death. The concessions the deceased qualified for are the 15-year exemption and the 50% active asset reduction. To qualify for these conditions, the deceased satisfied these conditions by: ● being a small business entity ● satisfying the maximum net asset value test ● satisfying the active asset test and ● the CGT assets were continuously owned for more than 15-years. As the deceased qualified for the small business 15-year exemption, the beneficiaries can entirely disregard the capital gain and do not need to apply any other concessions. Therefore the beneficiary of the deceased estate will be eligible for the small business CGT concessions. Further information on the relevant factors and death and small business CGT concessions generally can be found on our website ato.gov.au and entering Quick Code QC48078 into the search bar at the top right of the page.

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 deceased passed away in 20XX. The deceased owned property pre-CGT (parcel A) totalling more than 2 hectares. The deceased’s main residence is included in parcel A. The deceased owned property post-CGT (parcel B) totalling more than 2 hectares. The location of the property is in a remote area. The deceased had continual ownership of the assets for more than 15 years. The deceased appointed a sole beneficiary and a sole executor. The executor cares for the beneficiary and attempted to administer the estate as soon as practicable. Parcels A and B were leased before the deceased’s date of death and the business continued (post date of death) until sold. Parcel A had a contract of sale in 20XY and settled in 20XY. Parcel B was under a government agreement and was bound by this agreement and could not be sold separately. Parcel B had a contract of sale in 20YY and settled in 20YY.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10, | Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 subsection 118-195(1). | Income Tax Assessment Act 1997 Section 152-80.