Private ruling: Commissioner’s discretion
Date of advice: 8 March 2019
Published: May 2019
Ruling period: Year ended 30 June 201B | Year ended 30 June 201C | Year ended 30 June 201D | Year ended 30 June 201E
Date scheme commenced: 1 July 201A

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 to extend the time limit to allow the small business capital gains tax (CGT) concessions to be applied? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about death and the small business CGT concessions can be found by searching 'QC 52292' on ato.gov.au We have limited our ruling to the question raised in your application being whether an extension of time will be granted. You advised that the deceased would have been eligible to apply the small business CGT concessions if they had disposed of the property immediately prior to their death. The private ruling on whether an extension of time will be granted was issued on this basis, that is, the Commissioner did not consider the deceased’s eligibility for the small business CGT concessions. Further information about the concessions can be found by searching for 'QC 22165' on www.ato.gov.au

Relevant facts and circumstances: During the deceased’s lifetime they owned a property. Soon after the deceased’s death it became apparent that the will was going to be contested by parties who claimed they had not been adequately provided for, and made various accusations against the executors. The Court ordered the executors not to deal with the estate property and froze the bank accounts pending a settlement of the matters either by mediation or court determination. There was a protracted period of mediation hearings and eventually the claimants accepted a settlement. The effect of the dispute was that the executors were unable to carry out their functions for a substantial period of time. On several occasions during this period the executors were approached by prospective buyers for portions of the Estate’s property, however they were unable to enter into any negotiations as to do so would be in breach of the Court’s orders. Immediately upon being able to deal with estate assets the executors actively commenced efforts to sell the estate property. These actions included engagement with valuers, estate agents, the regional council and prospective buyers. A portion of the property was sold over two years after the deceased’s death. If the property had been disposed of immediately prior to the deceased’s death, they would have been eligible for various small business CGT concessions.

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