Private ruling: Extension of time to make a payment
Date of advice: 21 May 2026
Published: 3 August 2026
Ruling period: 30 June XXXX | 30 June XXXX | 30 June XXXX | 30 June XXXX | 30 June XXXX
Date scheme commenced: 1 July 20YY

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 152-125(4) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow additional time for the company to make a payment of the exempt amount under the small business 15-year exemption? | A1: Yes.

Relevant facts and circumstances: • The company made a capital gain in relation to a CGT event that occurred on DD MM XXXX. • The company satisfied all eligibility requirements for the small business 15-year exemption. • The exempt capital gain of $XXXXXX was disclosed in the company's income tax return for the year ended 30 June XXXX. • Just prior to the CGT event, the CGT concession stakeholders XXXX and XXXX, were both aged over X and the CGT event occurred in connection with their retirement. • Under paragraph 152-125(1)(b), the company was required to make a payment of the exempt amount to the CGT concession stakeholders within X years of the CGT event by DD MM XXXX. • The payment was not made within the required period. • The delay arose due to: - A serious and progressive medical conditions affecting XXXX, significantly deteriorating during the relevant period; - XXXX becoming a full-time carer, substantially impacting their ability to attend to company affairs; - A change in tax agents immediately prior to the deadline, resulting to disruption and missed identification of the deadline. • The funds have remained in the company bank account and have not been otherwise applied.

Relevant legislative provisions: Income Tax Assessment Act 1997 paragraph 152-125(1)(b) | Income Tax Assessment Act 1997 subsection 152-125(4)

Reasons for decision: Summary: The Commissioner will exercise discretion under subsection 152-125(4) of the ITAA 1997 and extend the two-year time limit for the company under paragraph152-125(1)(b) of the ITAA 1997 for a further two years. | Detailed Reasoning - Detailed reasoning: Under section 152-125 of Income Tax Assessment Act 1997 (ITAA 1997), where a company disregards a capital gain under the small business 15-year exemption, a payment of the exempt amount made to a CGT concession stakeholder is not included in the stakeholder's assessable income, provided the payment is made within two years after the CGT event under paragraph 152-125(1)(b) of the ITAA 1997. However, subsection 152-125(4) of the ITAA 1997 provides the Commissioner with a discretion to allow further time for the company to make the payment. In determining whether to exercise the discretion, the Commissioner considers whether: • There is an acceptable explanation for the delay and whether it is fair and equitable to allow additional time; • There is any prejudice to the Commissioner; • Allowing further time would unsettle other taxpayers or established administrative practices; • Allowing the extension would be fair to taxpayers in similar circumstances and consistent with the public interest; • There is any evidence of avoidance, mischief or manipulation; and • The consequences of granting or refusing the extension are appropriate in the circumstances. The discretion is exercised where the taxpayer has taken reasonable steps to comply with their obligation but has been prevented from doing so by circumstances outside their control. | Detailed Reasoning - Application to your circumstances: The Commissioner accepts that the delay in making the payment was due to factors outside the control of the company and its stakeholders. Significant consideration has been given to the serious and progressive medical condition affecting XXXX, which substantially deteriorated during the relevant two-year period. In the months leading up to the deadline, XXXX required extensive care, resulting in XXXX assuming the role of full-time carer. This affected XXXX capacity to attend to the administrative and financial affairs of the company. The Commissioner also recognises that there was a disruption in professional representation due to a change in tax agents shortly before the deadline, which further contributed to the distribution requirement not being identified and actioned. In the context of the personal circumstances, the administrative oversight is accepted as reasonable. The company has otherwise complied with its obligations, the capital gain was correctly reported, eligibility for the 15-year exemption was established and the funds have remained within the company. The delay did not arise from inaction, neglect or any attempt to obtain a tax advantage. Allowing additional time will not prejudice the Commissioner, as the substantive entitlement to the exemption is unaffected and the timing of the payment does not alter the underlying tax outcome. There is no evidence of avoidance or manipulation, rather the delay reflects an inadvertent compliance failure associated with exceptional personal hardship. The Commissioner accepts that the company was unable to make the payment within the original two-year period due to circumstances beyond its control and will exercise the discretion under subsection 152-125(4) of the ITAA 1997 to extend the deadline in paragraph 152-125(1)b) of the ITAA 1997 to 30 June XXXX.