Private ruling: Commissioners' discretion - deceased estate
Date of advice: 12 April 2024
Published: 3 June 2024
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 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 time limit to 30 June 20XX to allow the small business capital gains tax retirement concession to be applied to the disposal of your small business assets? | A1: Yes. Having considered the relevant facts, the Commissioner will exercise his discretion under subsection 152-80(3) of ITAA 1997 and will allow an extension of time until 30 June 20XX to apply for the small business retirement exemption. It was considered that you had intended to sell the assets however, a disagreement arouse between you and relatives of the deceased concerning the value of the land. This dispute was resolved in mediation resulting in a delay over 2 years which prevented the executors from processing the will. Therefore, it is fair and equitable to allow the extension.

Relevant facts and circumstances: You are the estate of the late AA. Person A passed away on a specified date. AA was the director in a company BB which operated a farming business. You provided us with details on AA's shareholding. AA was also a partner in 2 different partnerships that owned the properties used in the business of BB. You provided us with details of AA's share in both partnerships. You made the decision to sell various assets including AA's shares in BB and AA's part of the farmland. The other shareholders consisted of AA's child CC, grandchild DD, and DD's spouse EE. DD and EE disagreed on how the business was valued and how to treat the farming assets, this has delayed the sale of the estate. DD and EE commenced proceedings in the Supreme Court of FF against you challenging the will on a specified date. You reached an agreement with DD and EE after mediation on a specified date, pending tax advice. You have over 2 years to administer the estate due to these difficulties. You have stated that you meet the eligibility conditions to apply the small business retirement exemption. The properties have been held for over 15 years. You provided a copy of the company structure and records of the court proceedings.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-80 | Income Tax Assessment Act 1997 paragraph 152-80(1)(d) | Income Tax Assessment Act 1997 subsection 152-80(3)