Private ruling: CGT - small business concessions
Date of advice: 12 March 2025
Published: 19 May 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise their discretion under paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time for you to make a choice to apply any available small business capital gains tax (CGT) concessions? | A1: Yes. The general rule is that a choice available under the CGT provisions once made cannot be changed. Such a choice must usually be made by the time the income tax return is lodged or within such further time as the Commissioner allows. However, in your case, it is clear that the capital gain was declared in the incorrect year and the concessions were not considered, and no choice was made regarding the small business concessions when the relevant income tax return was initially lodged. Therefore, the Commissioner will allow an extension of time under paragraph 103-25(1)(b) of the ITAA 1997 to make a choice to apply any available CGT small business concessions to the gain arising from the sale of the property.

Relevant facts and circumstances: You owned a property. A business was carried on from the property throughout the ownership period. You executed a contract to sell the property. The sale of the property gave rise to a capital gain. Your tax agent erroneously included the capital gain in the incorrect income tax return. In preparing the relevant tax return, your tax agent failed to advise you of the availability of the small business CGT concessions. You have now become aware that you qualify for access to the concessions in relation to the sale of the property. The tax return for the relevant income year will be amended to report the CGT event and capital gain. You intend to apply the small business 50% reduction and the small business retirement exemption.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 103-25