Private ruling: Capital gains tax
Date of advice: 19 August 2020
Published: October 2020
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

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 retirement exemption to the capital gains that arose in the 20XX-XX income year? | A1: Yes, an extension will be granted to xxxx. Having considered your circumstances and the relevant factors the Commissioner considers it appropriate to grant an extension of time to access the small business retirement exemption. You were not aware of your eligibility for the small business CGT retirement exemption when you lodged your 20XX income tax returns. There would be no prejudice to the Commissioner or unsettling of people by allowing the extension. There has been no mischief involved and the Commissioner considers it fair and equitable in your circumstances to allow further time.


Relevant legislative provisions: Income Tax Assessment Act 1997 section 103-25 | Income Tax Assessment Act 1997 Subdivision 152-A | Income Tax Assessment Act 1997 Subdivision 152-D


Relevant facts: You sold a business on xxxx which resulted in a capital gain. | Whilst reviewing the small business capital gain exemptions available at the time of preparing the 20XX income tax returns, you misunderstood the criteria for the small business retirement exemption. As you thought you did not meet the relevant criteria, no choice was made to claim the exemption at the time the returns were lodged. You and your tax agent misinterpreted the relevant legislation. | Based on a review of your situation, it became evident that you were eligible to the make the choice to exempt the capital gain in 20XX. | You wish to be given the opportunity to make the choice to claim the small business retirement exemption and amend your 20XX returns. | You satisfy the basic conditions in Subdivision 152-A of the ITAA 1997. | You were over 55 at the time of the CGT event. | You have not used the CGT retirement exemption before and the CGT amount is below the retirement exemption limit. | You are able to lodge the amended tax return in the near future.