Private ruling: CGT - small business concessions
Date of advice: 12 December 2023
Published: 5 February 2024
Ruling period: Year ending 30 June 2023
Date scheme commenced: 1 July 2022

Ruling: Q1: Is the deceased estate entitled to the Capital Gains Tax (CGT) Small Business 15-year exemption under Subdivision 152-B of the Income Tax Assessment Act 1997 (ITAA 1997) on the sale of the property? | A1: Yes. As the deceased would have satisfied the conditions to apply the CGT Small Business 15-year exemption just prior to their death and the property was disposed of within 2 years of the deceased's death, the Legal Personal Representative (LPR) of the deceased's estate is entitled to apply the exemption to disregard any capital gain made upon the sale of the property.

Relevant facts and circumstances: The deceased died in the 2021-22 financial year, and they were over the age of 65 years on the date of their death. The deceased's last Will appointed the Public Trustee to be the Executor and the trustee of the Will. A Court Order authorised the Public Trustee to administer in accordance with the Will. The Will dictates that the residual estate is bequeathed to the deceased's nephews and nieces in equal entitlements. The property is part of the deceased's residual estate. The property was sold by the executor in the 2022-23 Financial year. The deceased purchased the property in 19XX. The deceased ran a business on the property as a sole trader. The property had been used in the deceased's business since its purchase. The aggregated turnover of the deceased's business in the financial year ending 30 June 2021 was less than X million dollars. The aggregated turnover of the deceased's business in the financial year ending 30 June 2022 (up to the deceased's date of death) was less than X million dollars.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-40 | Income Tax Assessment Act 1997 section 152-80 | Income Tax Assessment Act 1997 Subdivision 152-B | Income Tax Assessment Act 1997 section 152-105 | Income Tax Assessment Act 1997 section 328-110