Private ruling: Capital gains tax: small business concessions: Commissioner's discretion
Date of advice: 20 December 2019
Published: February 2020
Ruling period: Year ended 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 3 May 20XX

Ruling: Q1: Will the Commissioner allow further time under paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) for you to make a choice to utilise the small business capital gains tax (CGT) concessions? | A1: Yes. The Commissioner will allow further time. It is accepted that you did not make a valid choice at the time you lodged your income tax return. Having considered your situation, it is reasonable to grant an extension of time to make a choice to utilise the small business CGT concessions.

Relevant facts and circumstances: You and your late spouse purchased the farming property more than 15 years ago. You commenced carrying on a primary production business on the farming property via a partnership which ran until the death of one of the partners. The partnership was reconstituted after the death of one partner with additional partners. The property has been an active asset for more than 7.5 years and you have also allowed family members carry on a business from the property, and have remained involved with their activities. You have confirmed that you and your connected entities and affiliates do not exceed the $6 million maximum net asset value test under section 152-15 of the ITAA 1997. You acquired your spouse's interest in the property upon passing. You recently disposed of an interest in the farming property. You made a capital gain. The capital gain was not included in your income tax return. Your income tax return was completed without applying the small business 50% active asset reduction and small business retirement exemption. At the time of lodging your income tax return, you and your tax agent did not consider the application of the small business CGT concessions. You subsequently received advice from your tax agent and became aware concessions may be available in relation to the capital gain you made on the transfer of the farming property. You are over the age of 55.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 103-25(1) | Income Tax Assessment Act 1997 division 152