Private ruling: Capital gains tax and deceased estate
Date of advice: 24 May 2018
Published: July 2018
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 152-80 of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time until contract date? | A1: Yes | Q2: Will the estate be eligible to the small business concessions to the extent that the deceased would have been just prior to their death for their 50% share? | A2: Yes Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 152-80 of the ITAA 1997 and allow an extension of time until contract date. Further information on the relevant factors of ‘death and small business CGT concessions’ generally can be found on our website ato.gov.au and entering Quick Code QC52292 into the search bar at the top right of the page.

Relevant facts and circumstances: Your relatives purchased property in 19XX as joint owners. This property was not their main residence. The property was actively used to operate a primary production business. In 19XX, a relative took over the farm and its operation and received all plant and livestock. In 19XX, your relative ceased to be a primary producer and ceased their involvement in the business. In 20XX, your relative passed away and left their share to your other relative, totalling the share to 100%. Your relative executed a will in 20XX. Your other relative (deceased) passed away in 20XX (DOD) and they had bequeathed their assets to beneficiaries as tenants in common with equal shares. The deceased had other relatives that were not accounted for in the will. Probate was granted in 20XX. Due to the other relatives not being accounted for in the will, the will was contested and this took time to resolve. An agreement was reached on the distribution of the deceased’s estate by way of a Deed of Family Agreement that was executed in 20XX. The property was sold in 20XX. The deceased had continuously owned the property for more than 15 years and therefore would have qualified for the small business concessions if they had disposed of the property immediately before their death and the asset was an active asset of the deceased for a total of least 7.5 years during the test period.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10, | Income Tax Assessment Act 1997 section 152-80 and | Income Tax Assessment Act 1997 subsection 152-100.