Private ruling: Small business concessions
Date of advice: 25 July 2016
Published: September 2016
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to 30 June 2017 to allow the small business capital gains tax (CGT) concessions to be applied? | A1: Yes.

Relevant facts and circumstances: The deceased passed away during the relevant financial year. The deceased was over 55 years old when they passed away. The deceased and their spouse own land which is used for farming. The land has been in the deceased's family since the early 1900's. It was farmed by family until the deceased and their spouse took over from the mid-19XX's. The deceased and their spouse renewed a farm lease for use of their land prior the deceased's death. The term of the lease is three years. It is only in recent years that the farm has been leased due to the age of the deceased and their spouse.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 152-80

Reasons for decision: Summary: Section 152-80 of the Income Tax Assessment Act 1997 (ITAA 1997) allows either the legal personal representative of an estate or the beneficiary to apply the small business CGT concessions in respect of the sale of the deceased's asset in certain circumstances. In order to apply the concessions the CGT events must happen in relation to the CGT assets within two years of the individual's death. This time limit may be extended by the Commissioner under subsection 152-80(3) of the ITAA 1997. In determining whether to exercise the discretion to extend the time limit set out in paragraph 152-80(1)(d) of the ITAA 1997, the Commissioner has considered the following factors: • whether there is evidence of an acceptable explanation for the period of extension requested and whether it would be fair and equitable in the circumstances to provide such an extension, • whether there is any prejudice to the Commissioner if the additional time is allowed, however the mere absence of prejudice is not enough to justify the granting of an extension, • whether there is any unsettling of people, or of established practices, • fairness to people in like positions and the wider public interest, • whether there is any mischief involved, and • the consequences of the decision. Having considered the circumstances of this particular case and the factors outlined above, the Commissioner is able to apply his discretion to extend the time limit in paragraph 152-80(1)(d) of the ITAA 1997 .