Private ruling: Capital gains tax and deceased estates
Date of advice: 10 December 2020
Published: February 2021
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 28 January 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to allow the small business CGT concessions to be applied in relation to XX percent of the farming property? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner is able to apply the discretion under subsection 152-80(3) of the ITAA 1997 and allow an extension of time until the farming property was sold. Further information on the small business CGT concessions and how they apply when someone has passed away can be found on our website: ato.gov.au by searching quick code QC52292. Note: We have limited our ruling to the question raised in your application being whether an extension of time will be granted. You advised that XXXX would have been entitled to apply the small business CGT concessions on XX percent of the farming property before passing away. The private ruling on whether an extension of time will be granted was issued on this basis, that is, the Commissioner did not consider whether XXXX was in fact entitled to the small business CGT concessions. More information about the concessions can be found by searching 'QC 22165' on ato.gov.au

Relevant facts and circumstances: XXXX owned XX percent of the farming property as a pre-CGT asset. He inherited the remaining XX percent when his Father passed away in XX/XX/XXXX. He ran a farming enterprise on this property for over XX years. XXXX passed away on XX/XX/XXXX. Executers were granted probate of the will on XX/XX/XXXX. On XX/XX/XXXX a person commenced proceedings seeking provision from the deceased estate. The executers could not make unanimous decisions and they petitioned the court on XX/XX/XXXX to be removed and an independent executor appointed. This application was heard in court on XX/XX/XXXX and an order was made to appoint the independent executor on XX/XX/XXXX. The Letters of Administration were granted to this executor on XX/XX/XXXX. On XX/XX/XXXX the deceased's defacto spouse, claimed that she could not afford to relocate from the property where she had been residing since XXXX died. On XX/XX/XXXX his defacto spouce gave notice that she was claiming further provision from his estate. An interim distribution was made to her on XX/XX/XXXX to enable her to relocate from the property. She completed the move on XX/XX/XXXX. The property was valued on XX/XX/XXXX. A contract of sale for the property was entered into on XX/XX/XXXX. The sale of the property settled on XX/XX/XXXX.

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