Private ruling: Small business concessions
Published: December 2014
Ruling period: Year ended 30 June 2014 | Year ended 30 June 2015
Date scheme commenced: 1 July 2013

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 x to allow the small business capital gains tax (CGT) concessions to be applied? | A1: Yes

Relevant facts and circumstances: The deceased passed away in 20xx. The deceased owned 2 parcels of farming land. The farming land has been used in a primary production business for the entire period of ownership. The will of the deceased was disputed. Probate was not granted until early 20xx. Both properties were placed on the market shortly after probate. One parcel of land was sold in May 20xx while the other remains on the market. The farming land is an active asset and the deceased would have satisfied all the basic conditions of the small business CGT concessions.

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

Reasons for decision: Summary: 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 sale of the deceased'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 concessions themselves if they had disposed of the asset immediately prior to their death, and • a CGT event happens within 2 years of the deceased's death unless the Commissioner extends the time period in accordance with subsection 152-80(3) of the ITAA 1997. In determining whether the discretion to allow further time would be exercised, the Commissioner has considered the following factors: • evidence of an acceptable explanation for the period of the extension requested (and whether it would be fair and equitable in the circumstances to provide such an extension) • prejudice to the Commissioner which may result from the additional time being allowed (but the mere absence of prejudice is not enough to justify the granting of an extension) • unsettling of people, other than the Commissioner, or of established practices • fairness to people in like positions and the wider public interest • whether any mischief is involved, and • consequences of the decision. A legal dispute in relation to the will has significantly delayed the sale of the property. We consider that the period when probate and when the property was sold was reasonable given the nature of the property. We do not consider that allowing this request would cause the unsettling of others or that there is any mischief involved. Accordingly, the Commissioner will exercise his discretion under subsection 152-80(3) of the ITAA 1997 to extend the time period until the 30 June 2015 to access the small business concessions .