Private ruling: Capital gains tax
Date of advice: 14 May 2026
Published: 27 July 2026
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: July 20XX

Ruling: Q1: Will the Commissioner exercise their discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to May 20XX for the interests in Parcel B and Parcel C at the Property inherited from the Deceased to be disposed of so the small business capital gains tax (CGT) concessions can be applied to the proceeds from the CGT events? | A1: Yes.

Relevant facts and circumstances: The Deceased operated a partnership (the Partnership) alongside the Deceased's spouse (You) and the Deceased's sibling (the Sibling). The Partnership operated the Business. This was a livestock and cropping business. The Business was operated at the Property. The Property was divided into several parcels (the Parcels). The Parcels were owned by either: • the Deceased individually, • the Deceased and You jointly, • the Deceased and the Sibling jointly, or • the Sibling individually. For a significant time, the Deceased also lived with You in a house (the House) located on one of the parcels, the Deceased and You owned jointly. The Deceased and You had no children. The Deceased's will appointed You and the Sibling as primary executors to the Deceased's estate (Estate 1). The Deceased's will appointed one of the Deceased's and the Siblings first cousins (the First cousins) as a secondary executor to Estate 1. The First cousin was to act as a backup and assist either You or the Sibling in the event either You or the Sibling pass away and can no longer act as an executor to Estate 1. The Deceased's will appointed You and the Sibling as beneficiaries to Estate 1. In May 20XX, the Deceased passed away. The Deceased passed away suddenly and minimal prior planning had been undertaken to manage the Deceased's affairs after the Deceased's passing. On the Deceased's passing, You and the Sibling wanted to take some time to ascertain what the future of the Business would be. Therefore, You and the Sibling continued to operate the Business and make decisions in relation to the Business going forward. The Sibling became ill suddenly. The Sibling was required to take urgent action in finalising the Sibling's will. The Sibling had no spouse or children. The Sibling decided to appoint the Sibling's neighbour (the Neighbour) as the executor to the Sibling's estate (Estate 2). The Sibling decided to appoint the Deceased's and the Sibling's second cousins (the Second cousins) as beneficiaries to Estate 2. The First cousin was not a beneficiary of Estate 2. In December 20XX, the Sibling passed away. You were left to grieve the loss of Your spouse and Your sibling-in law simultaneously. You were now left as an executor of Estate 1 along with the First cousin. Under the Deceased's will, the Sibling was left the Deceased's interest in a parcel, known as Parcel X. You were the sole beneficiary of the remaining parcels in Estate 1. This was before Estate 1 was determined. You were required to determine how to progress applying for probate for Estate 1 with one of the beneficiaries passing away before Estate 1 had been determined. You were also left to cooperate with the Neighbour to ensure Estate 2 was managed in respect of the Business. Following the Sibling's passing, it was ultimately decided in consultation with the Neighbour to wind up the Business. As the Business was a livestock business, decisions needed to be made in relation to the living animals. As the Business was also a cropping business, decisions needed to be made with consideration to any impacts on the next cropping season. There was a priority for You to make decisions in relation to the Business going forward, leaving decision-making in relation to the Parcels to be temporarily paused. At a meeting between You, the Neighbour, the First cousins and the Second cousins in XXX 20XX, it was decided to cease the Partnership and the Business and to sell the Business' assets by XXX 20XX. In XXX 20XX, probate was granted for Estate 1. In XXX 20XX, probate was granted for Estate 2. The Deceased's interests in any of the Parcels were to be transferred to You. This is except for the Deceased's interest in Parcel X, which was owned by the Deceased and the Sibling jointly. As the Sibling was living in a house on Parcel X, the Deceased's interest in Parcel X, was to be transferred to the Sibling. The Sibling's interests in any of the Parcels were to be transferred to the Second cousins. You decided to sell Your interests in any of the parcels which were initially owned by the Deceased individually or owned by the Deceased and the Sibling jointly. You decided to sell Your interests in these parcels to the Second cousins. Before doing so, You were in negotiations with the Second cousins. This is except for Your interest in a parcel which was initially owned by the Deceased individually, known as Parcel A, which was to remain. The Deceased purchased Parcel A before 20 September 19YY. You still obtain Your interests in any of the Parcels which were initially owned by the Deceased and You jointly. These parcels are known as Parcel B and Parcel C. The Deceased and You purchased Parcel B and Parcel C after 20 September 19YY. The Deceased and You owned Parcel B and Parcel C as joint tenants. The Deceased's interests were transferred to You as the surviving joint tenant when the Deceased passed away. Parcel A was solely owned by the Deceased. You now lease Parcel A, Parcel B and Parcel C to Your nephew (the Nephew) to operate the Nephew's own business. This is except for the portion of Parcel B which features the House, where You are still living part-time. It was difficult for You to make decisions in relation to the entirety of Parcel B, as this is where the House is situated. Despite this, You have decided to sell Parcel B, along with Parcel A and Parcel C. You plan to sell Parcel A, Parcel B and Parcel C by XXX 20XX.

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

Reasons for decision: Summary: The Commissioner will exercise their discretion under subsection 152-80(3) of the ITAA 1997 to extend the period to May 20XX, allowing You to access the small business CGT concessions for the interests in the parcels to be sold under the CGT event. In consideration of all the facts and circumstances, including the delay in the sale of the parcels being caused by circumstances You experienced after multiple family members' passings, there are no factors that would suggest allowing further time would not be fair and reasonable. Therefore, the Commissioner will exercise the discretion. | Detailed Reasoning - Detailed reasoning: Section 152-80 of the ITAA 1997 allows either the legal personal representative of an estate or the beneficiary to apply the small business CGT concessions in respect of the disposal of a deceased estate's asset in certain circumstances. Specifically, the following conditions must be met: • the asset devolves to the legal personal representative or passes to a beneficiary, • the deceased would have been able to apply the small business CGT concessions themselves if they had disposed of the asset immediately prior to their passing, and • a CGT event happens within X years of the deceased's passing unless the Commissioner extends the time length in accordance with subsection 152-80(3) of the ITAA 1997. In determining whether the discretion to allow further time would be exercised, the relevant factors the Commissioner considers are: • whether there is evidence of an acceptable explanation for the period of extension requested and that it would be fair and equitable in the circumstances to provide such an extension, • whether there is any prejudice to the Commissioner which may result from the additional time being allowed, however the mere absence of prejudice is not enough to justify the granting of an extension, • whether there is any unsettling of people, other than the Commissioner or of established practices, • the need to ensure fairness to people in like positions and the wider public interest, • whether there is any mischief involved, and • the consideration of the consequences. | Detailed Reasoning - Application to your circumstances: In considering whether to exercise their discretion, the Commissioner needs to be satisfied there were circumstances beyond Your control that prevented You from disposing of the asset within X years. In this case, You experienced complications with making decisions in relation to the Business and the parcels after both the Deceased's and the Sibling's passings. It is also noted a minimal timeframe exists for any decisions to have been made after the Deceased's passing but before the Sibling's passing. The circumstances they have experienced are substantial and we accept this prevented You from disposing of the parcels within X years of the Deceased's passing. We do not consider that allowing an extension in this case would unsettle other people or that there is any mischief involved. Accordingly, the Commissioner will exercise their discretion under subsection 152-80(3) of the ITAA 1997 to extend the period to XXX 20XX.