Private ruling: CGT - small business concessions - extension of time
Date of advice: 20 June 2023
Published: 14 August 2023
Ruling period: Year ending 30 June 2024
Date scheme commenced: 1 July 2022

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (lTAA 1997) to allow further time for you to choose to apply the small business retirement exemption to the capital gain you made on the disposal of an active asset? | A1: Yes. The general rule is that a choice available under the capital gains tax (CGT) provisions once made cannot be changed. Generally, such a choice must be made by the time you lodge your tax return or within such further time as the Commissioner allows. However, in your case, you were not aware that a choice to apply the small business retirement exemption was available to you and as such you did not make a choice before lodging your tax return. In the circumstances, the Commissioner will exercise the discretion to allow further time for you to make the choice.

Relevant facts and circumstances: You are under 55 years old. You sold a CGT asset and made a capital gain. You were unaware that you could make a choice to apply the small business retirement exemption to the capital gain when you prepared your tax return. If you are allowed further time to make the choice you will make the necessary contribution to superannuation as required by the small business retirement exemption.

Relevant legislative provisions: Income Tax Assessment Act 1997 paragraph 103-25(1)(b)