Private ruling: CGT - small business concessions
Date of advice: 30 June 2022
Published: October 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 152-80(3) Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit to apply the small business capital gains tax concessions to the deceased's interest in the property? | A1: Yes, after taking into consideration, the type of property and the location, one attempted sale falling through, listing the property with two different real estate agents and COVID-19 restrictions making the sale difficult, the Commissioner will allow an extension of time beyond two years to XX July 20XX as per subsection 152-80(3) of the ITAA 1997 to apply the CGT small business concessions.

Relevant facts and circumstances: You and your late spouse purchased a property after 20 September 1985 as joint tenants. Your spouse passed away on XX January 20XX, and their interest in the property passed to you as a joint tenant. The property was used by a connected entity to operate a business since acquisition. The deceased would have met the basic conditions to apply the CGT small business concessions in relation to their interest in the property just before their death. The business continued to operate after your spouse died until October 20XX, although due to Covid-19 causing a downtown in travel due to lockdowns the decision was made to cease the business and sell the property. It has been challenging to find potential buyers due to the property being zoned as light commercial and location of the property. The property was placed on the market through a real estate agent. An offer was made by a neighbour to purchase the property in November 20XX, although the offer fell through due to not being able to acquire the necessary finance. A second real estate agent was engaged in January 20XX. The property was sold with a contract date of XX July 20XX.

Relevant legislative provisions: Subsection 152-80(3) Income Tax Assessment Act 1997