Private ruling: Extension of time small business CGT concessions
Date of advice: 19 March 2020
Published: May 2020
Ruling period: Year ending 30 June 2020
Date scheme commenced: 1 July 2019

Ruling: Q1: Will the Commissioner, pursuant to subsection 152-80(3) of the Income Tax Assessment Act 1997 , grant an extension of time to allow the small business capital gains tax (CGT) concessions to be applied to the deceased estate's 50% ownership interest in the property? | A1: Yes.Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information on death and the small business CGT concessions can be found on our website, ato.gov.au by searching QC52292

Relevant facts and circumstances: The deceased acquired a 50% interest in the property post CGT as tenants in common with their spouse. The property did not accommodate or provide for either the deceased or their spouse's principal place of residence. The property was used to operate a business of primary production through a partnership. The deceased died on 20XX. The partnership terminated upon date of death. The deceased's 50% interest transferred to the legal personal representative of the deceased estate. The deceased had given their spouse a life interest to 50% ownership share of the property. The deceased's spouse had an arrangement with their child (beneficiary A) to continue the business of primary production on their behalf as they were unable to physically conduct the business due to health. Beneficiary A also conducted their own business of primary production on the property. The deceased's spouse died on 20XX. Beneficiary A indicated they would purchase the property from the Estate. On 20XX the executor engaged a lawyer to act on the Estate's behalf. Probate was granted in 20XX. A second Will was produced naming five executors to the Estate. None of the beneficiaries were ever made aware of this later Will. Consent was provided by all the executors named in the Will to nominate a sole executor to the Estate. The Estate was then required to re-apply for Probate after applying to the Supreme Court to revoke the earlier grant of probate. Probate was granted in 20XX. The executor was advised to await the expiration of the six month limitation period for a claim to be brought against the Estate before entering into negotiations with beneficiary A to purchase the land from the Estate. On 20XX the Estate received a letter from beneficiary A advising they intended to purchase the land and sought an extension of time of four weeks to sort out finances. No offers were received from beneficiary A and the exclusive sale authority was signed on 20XX to place the property up for sale. On 20XX the Lawyers for the Executor of the Estate wrote to beneficiary A's lawyer advising receipt of an offer from a third party to purchase the property and beneficiary A was given until 20XX to make a formal offer to purchase the property from the Estate. On 20XX an email from beneficiary A's lawyer advised that beneficiary A would not be making an offer and agreed to the sale of the property. The executor negotiated special conditions to be included in the contract of sale. The contract was signed by the executor on 20XX with settlement on 20XX. Immediately prior to death, the deceased satisfied the maximum net asset value test and was aged 55 years or older. The deceased would have qualified for the small business CGT concessions if they had disposed of interest in the property immediately prior to death.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-80