Private ruling: Capital gains tax – small business concessions – extension of time
Date of advice: 25 January 2018
Published: June 2018
Ruling period: 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Will the Commissioner allow further time as provided in paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) for you to choose to apply the small business rollover to a capital gain that arose in the 2015-16 financial year? | A1: Yes, an extension will be granted to XXXX. Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 103-25(1) of the ITAA 1997 and allow an extension of time. Further information on the relevant factors and CGT concessions generally can be found on our website ato.gov.au by entering Quick Code QC22655 into the search bar at the top right of the page.

Relevant facts and circumstances: You triggered a capital gain when you sold property in the financial year of 2015-16. This property was an active asset as it was used in the course of carrying on a business by a trust, an entity connected to you. You entered into a contract of sale in 2016, with an extended settlement date to 2017, which was a condition of the contract. At the time of the CGT event, you satisfied the conditions to access the small business concessions in Division 152 of the ITAA 1997. You lodged your 2015-16 return and did not make an election to choose the small business rollover in the relevant year the CGT event happened. Your tax return for the 2015-16 financial year was lodged stating that you did not make any capital gain for that year. You had not made an election to choose the small business rollover as you did not turn your mind to it and you did not apply any small business concessions. At the time of lodgment you met the small business 50% active asset reduction and the small business rollover. This still remains the case. You intend to make a choice to apply the active asset reduction to the capital gain when you lodge an amendment to your tax return for the 2015-16 financial year.

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