Private ruling: Extension of time
Date of advice: 15 January 2026
Published: 2 March 2026
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: XX May 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in subsection 152-125(4) of the Income Tax Assessment Act (ITAA 1997) to extend the time limit that would ordinarily apply to payments being made under paragraph 152-125(1)(b) of the ITAA 1997, that relate to certain exempt amounts derived by the Company from CGT events that happened in the year of income ended 30 June 20XX? | A1: Yes. Having considered the relevant circumstances, the Commissioner will exercise his discretion and extend the two year time limit under subsection 152-125(4) of the ITAA 1997. The Company was unable to make the payment to the shareholders due to the legal proceeding between them. This was outside the Company's control.

Relevant facts and circumstances: Person A, Person B and the Company are parties to family law proceedings before an Australian court. Person A and Person B are the only shareholders in the Company. The Company was placed into liquidation by its creditors. From that time, the Liquidator caused subdivided real property owned by the Company to be sold to pay debts owed by the Company. In the 20XX income year, the Company disposed of real property, including both pre-CGT and post-CGT real property. In the 20XX income year, the Company disposed of the remaining real property it held. The capital gains from the disposal of post-CGT real property in these income years, to the extent they were not used to pay debts of the Company, were recorded in the CGT Exempt Reserve of the Company. Part of those amounts were distributed by the Company in the 20XX income year to Person A and Person B. The Liquidator consented to those distributions. The capital gains from the disposal of pre-CGT real property in the 20XX income year, to the extent they were not applied to pay debts of the Company, were recorded in the CGT Exempt Reserve of the Company. By around the 20XX income year, the Liquidator had applied the capital gains made in the 20XX income year to satisfy all outstanding debts of the Company. At that time, assets remained available for distribution to Person A and Person B. By that time, Person A had commenced proceedings against Person B. The liquidation of the Company was not finalised, and the Liquidator remained in control of the Company while the family law proceedings continued. Since the commencement of the family law proceedings, the Liquidator has required leave of the Court under section 488 of the Corporations Act to make any distributions. No such orders have been made to date. A request will be made to the court approving the payment of the exempt amounts before the end of the 20XX financial year.

Relevant legislative provisions: Income Tax Assessment Act 1997 paragraph 152-125(1)(b) | Income Tax Assessment Act 1997 subsection 152-125(4)