Private ruling: Income tax – capital gains tax – small business concessions
Date of advice: 18 May 2019
Published: July 2019
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 to extend the time limit to X August 20XX to allow the small business capital gains tax (CGT) concessions to be applied? | A1: Yes. In this case, we consider that you have provided a reasonable explanation for the delay in the disposal of the CGT asset. Considering the timeframe involved, we do not consider that allowing this request would cause the unsettling of others. Accordingly, the Commissioner’s discretion will be exercised to extend the time period to XX August 20XX .

Relevant facts and circumstances: You and Individual B operated a business on the property. The property was purchased in 19XX. The business had an aggregated turnover of less than $2 million. You and Individual B operated the business until Individual B passed away on XX January 20XX. After this time you were not in a position to continue the farming operation on your own and you attempted to sell the property. There was minimal interest in the property and in November 20XX a bushfire destroyed the property and its fencing. The property had no value in its current state after the fire so you engaged a contract to replace the fencing in its entirety. This took a considerable amount of time; after this was completed you then offered the property for sale again. Despite replacing the fencing there was still little interest shown in the property by the market however it sold on X August 20XX. The property derived passive income for a period of approximately X years after the death of Individual B.

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