Private ruling: Income tax- small business concessions - extension of time for a deceased estate
Date of advice: 3 February 2020
Published: March 2020
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 01 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two year time limit? | A1: Yes. In this instance we consider that you have provided a reasonable explanation for the delay in disposal of the CGT asset. We do not consider allowing this request would cause the unsettling of others. Accordingly, the Commissioner will exercise his discretion under subsection 152-80(3) of the ITAA 1997 to extend the time period. We have limited our ruling to the question raised in your application being whether an extension of time will be granted. You advised that the deceased would have been eligible to apply the small business CGT concessions if the deceased had disposed of the property immediately prior to their death. The private ruling on whether an extension of time will be granted was issued on this basis, that is, the Commissioner did not consider the deceased's eligibility for the small business CGT concessions. Further information about the small business CGT concessions can be found by searching for 'QC 22165' on www.ato.gov.au

Relevant facts and circumstances: The Deceased operated a business as a sole trader. Immediately prior to their death the Deceased would have been eligible to utilise the Small business CGT concessions. The Deceased passed away. Executors and Legal Personal Representatives of the Estate were appointed. The Executors have continued to operate the small business enterprise whilst selling down the assets within the Estate. The Executors have endeavoured to sell all assets of the Estate of the Deceased; however, circumstances beyond their control, have resulted in an asset of active farming land, not being sold and settled within two years of the date of death of the Deceased. Probate and collating of asset information including land titles for all farming land parcels and legal direction was initially actioned by the Deceased's previous solicitors. The appointed lawyer within the firm experienced significant personal loss, so was difficult to reach and unresponsive. The Executors and the Estate's accountants found it very difficult to obtain any information from the lawyers to aid in the selling down of assets by obtaining Land Titles. Another lawyer was appointed however communication and obtaining information from the firm including the location of titles for all the parcels of farming land remained difficult and eventually new titles had to be issued for some of the farming land. A third lawyer was appointed. The properties went to auction resulting in all but one being sold. The unsold property continues to be actively advertised for sale.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 152-80(3)