Private ruling: Small business concessions - Commissioner's discretion
Published: November 2013
Ruling period: Year ended 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015
Date scheme commenced: 1 July 2012

Ruling: Q1: Will the Commissioner exercise his discretion under paragraph 152-180(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two year period? | A1: Yes

Relevant facts and circumstances: The deceased had owned blocks of farming land. The deceased had farmed then leased the land until they passed away in 200X. These blocks were left to you in the will of the deceased. The will was subsequently contested, preventing you from disposing of the properties as intended. For you to put the blocks on the market, you had to prepare the blocks for sale which has taken considerable effort. Due to the nature of the blocks of land not being premium farming land they have been slow to sell, but have been actively marketed. Several blocks have been sold to date and there are still a few blocks of land remaining. The deceased would have been entitled to access the small business CGT concessions prior to their death.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 150-80(3).

Reasons for decision: Summary: According to the Advance guide to capital gains tax concessions for small business 2010-11 , if you are a beneficiary of a deceased estate you may be eligible for the concessions to the same extent that the deceased would have been just prior to their death. You will be eligible for the concessions where the CGT event happens within two years of the individual's death. The active asset test applies to you for any capital gain made on a sale of the assets after the two year time limit. This means that if you do not continue to carry on the deceased's business, or use the asset in another business, after the two year time period the active asset test may not be satisfied and the small business concessions may not be available. However, in appropriate circumstances, the Commissioner may extend this two year period. The abovementioned guide also provides the relevant considerations applied by the Commissioner to extend the two year period. Having regards to your full circumstances and the above principles, the Commissioner will allow an extension of time.