Private ruling: CGT EOT deceased estate
Date of advice: 5 January 2026
Published: 2 March 2026
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise discretion under section 152 - 80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time for you to apply the small business CGT concessions to a capital gain on the sale of your interest in the properties until 30 June 20XX? | A1: Yes

Relevant facts and circumstances: The deceased died in 20XX. A coronial investigation was required to determine the cause of death. The deceased estate included interests in two properties. Property A was acquired by the deceased in 20XX. Property B was acquired by the deceased in 20XX with 50% interest gifted. A further 50% interest was acquired in 20XX. The deceased had utilised the properties in carrying on a primary production business as a sole trader for the entire period of ownership. Just prior to their death, the deceased would have satisfied the basic conditions to apply the small business CGT concessions. In July 20XX executors met with lawyers to provide initial instructions. In December 20XX probate was granted by the Supreme Court to the executors. The lawyer who took the initial instructions and had carriage of the file left the law firm in April 20XX. The file was then allocated to another lawyer who left the firm in July 20XX. Due to the firm's regional location they have been unable to find a suitable replacement. The firm has an excessive number of estate files and due to staff turnover and staff shortages they are unable to complete the administration of the estates in a timely manner. Three of the titles owned by the deceased were mortgaged to the bank. The bank would not allow the executors to be registered on two of the titles until the mortgage discharged. There were lengthy delays with the bank and their various departments organising the mortgage to be discharged. In December 20XX the executors were registered on Property B In June 20XX the bank discharged their mortgage over Properties A and B In June 20XX the executors registered on Property A In September 20XX the beneficiaries were registered on Properties A and B. In September 20XX both property interests were transferred from the Estate to the beneficiaries in equal shares. In February 20XX you transferred your 1/6 interest in Property A, and your 1/3 interest in Property B.

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

Reasons for decision: Summary: Section 152-80 of the Income Tax Assessment Act 1997 entitles the Legal Personal Representative (LPR) or Beneficiary to access the small business CGT concessions in Division 152 in the same way that the deceased individual would have been entitled to just before their death, if the following conditions are met: (a) A CGT asset forms part of the estate of a deceased individual or was owned by a joint tenant who dies; and (b) The asset transfers to the legal personal representative or passes to a beneficiary, an interest in the asset is acquired by the surviving join tenant or tenants (as the case may be) as mentioned in section 128-50; or the asset devolves to a trustee of a trust established by the will of the individual; and (c) The deceased would have been entitled to reduce or disregard a capital gain from a CGT event under the small business concessions, immediately before their death and (d) A CGT event occurred within 2 years of the deceased's death, with the exception of subsection 152-80(3) of the ITAA 1997, where the Commissioner can allow an extension of time. The two-year time limit prescribed may be extended by the Commissioner in accordance with subsection 152-80(3) of the ITAA 1997 in certain circumstances. In determining whether a longer period will be allowed, the Commissioner will consider a range of factors such as: • whether there is evidence of an acceptable explanation for the period of extension requested and whether it would be fair and equitable in the circumstances to provide such an extension, • whether there is any prejudice to the Commissioner if the additional time is allowed, however the mere absence of prejudice is not enough to justify the granting of an extension, • whether there is any unsettling of people, other than the Commissioner, or of established practices. • fairness to people in like positions and the wider public interest, • whether there is any mischief involved • the consequences of the decision. | Detailed Reasoning - Application to your circumstances: The properties formed part of the deceased's estate. The properties transferred to the beneficiaries in accordance with the deceased's will. The CGT event did not occur within two years of the deceased's death and therefore, to reduce or disregard any capital gain from the CGT event, the discretion under subsection 152-80(3) will need to be applied. As discussed above, the Commissioner will consider a range of factors in determining whether a longer period will be allowed. You have provided evidence explaining why the period of extension has been requested including a coronial investigation to determine the deceased's cause of death, lengthy delays with Bank regarding discharging of the mortgages and the lawyers experiencing staff turnover and shortages that left them unable to administer the estate in a timely manner Allowing the additional time requested will not, in your circumstances, prejudice the Commissioner, nor will it lead to an unsettling of people, other than the Commissioner, or of established practice, nor is it unfair to people in like positions or detrimental to the wider public interest. There is no evidence of any mischief involved and allowing the extension will enable you to apply the small business CGT concessions to reduce or disregard the capital gain made from the sale of the properties in the way that the deceased would have been able to do if the CGT assets has been sold immediately before their death. Considering your circumstances, the Commissioner will exercise the discretion under subsection 152-80(3) of the ITAA 1997 and allow an extension of time beyond 2 years to 30 June 2025.