Private ruling: Commissioner's discretion - extension of time
Date of advice: 23 September 2022
Published: December 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997), to grant an extension of time to apply the small business CGT concessions in relation to the disposal of the deceased's interest in the property? | A1: Yes. The property was owned by you and the deceased, who passed away in 20XX. You acquired the property as the surviving joint tenant in line with section 128-50 of the ITAA 1997. After taking into consideration the events which prevented the property being ready for sale, including natural disaster, as well as delays from the COVID-19 lockdowns, the Commissioner grants an extension of time beyond the two years in accordance with subsection 152-80(3) of the ITAA 1997.

Relevant facts and circumstances: In March 19XX, you and the deceased purchased a commercial property (the Property) as joint tenants. The Property was used by a CGT small business entity connected with you and the deceased to conduct its business for over 15 years. In March 20XX, the deceased died. At the time of their passing a portion of the property which contained a separate building was being leased to an independent non-related business. In late 20XX, the tenant vacated the Property. In January 20XX, the region was severely impacted by bushfires. In February 20XX, the region was subject to a major flooding event. In March 20XX, the region was in lockdown because of COVID-19. You were unable to find tradespeople to complete required repair work. In November 20XX, you finalised the repair work and placed the property on the market. The property was sold in May 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 128-50 | Income Tax Assessment Act 1997 section 152-80