Private ruling: Extension of time
Published: May 2012
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Will the Commissioner extend the 2 year time limit under paragraph 152-180(3) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes.

Relevant facts and circumstances: The deceased had owned blocks of land. The deceased passed away in after 30 June 2007. These blocks were left to you in the will of the deceased. The will was subsequently contested, preventing the taxpayer from disposing of the properties as intended. For you to put the blocks on the market, you had to prepare the blocks for sale by removing the plant and equipment on each site which had taken considerable effort to do so. The blocks of land have been slow to sell, but have been actively marketed. The first block of land has been sold after 30 June 2010. The deceased would have been entitled to access the small business capital gains tax concessions prior to their death.


Reasons for decision: Summary: According to the Advance guide to capital gains tax concessions for small business 2010-11, if you are a beneficiary of a deceased estate you may be eligible for the concessions to the same extent that the deceased would have been just prior to their death. You will be eligible for the concessions where the CGT event happens within two years of the individual's death. The active asset test applies to you for any capital gain made on a sale of the assets after the two year time limit. This means that if you do not continue to carry on the deceased's business, or use the asset in another business, after the two year time period the active asset test may not be satisfied and the small business concessions may not be available. However, in appropriate circumstances, the Commissioner may extend this two year period. The abovementioned guide also provides the relevant considerations applied by the Commissioner to extend the two year period. Having regards to your full circumstances and the above principles, the Commissioner will allow an extension of time.

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