Private ruling: Commissioner's discretion - small business concessions
Date of advice: 17 March 2026
Published: 11 May 2026
Ruling period: Year ended 30 June 20XX
Date scheme commenced: DD MM 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the 2-year time limit so that you can apply the small business capital gains tax (CGT) concessions to the capital gain? | A1: Yes.

Relevant facts and circumstances: The deceased passed away on DD MM 20XX. At the time their death, they owned a property and a business with their spouse. You began negotiations with potential buyer to sell the business and property on DD MM 20XX. You sought accounting advice regarding the sale. You sent the contract to the potential buyer and experienced some delays and disagreement before the sale was finalised. You subsequently sold the business and land on DD MM 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-80 | Income Tax Assessment Act 1997 paragraph 152-80(1)(d) | Income Tax Assessment Act 1997 subsection 152-80(3)

Reasons for decision: Summary: Section 152-80 of the ITAA 1997 provides that where CGT event happens to an asset or interest within 2 years of individual's death, the capital gain can be reduced or disregarded in the same way that the deceased individual would have been entitled to if a CGT event had happened in relation to the CGT asset immediately before their death. Under paragraph 152-80(1)(d) of the ITAA 1997, a CGT event must happen in relation to the CGT asset within 2 years of the individual's death. The Commissioner has the discretion to extend the time limit under subsection 152-80(3) of the ITAA 1997. The Commissioner has considered the following factors in determining whether to exercise the discretion to extend the time limit set out in paragraph 152-80(1)(d) of the ITAA 1997: • whether there is evidence of an acceptable explanation for the period of extension requested and whether it would be fair and equitable in the circumstances to grant the extension • whether it would be prejudicial to the Commissioner to grant further time. The absence of prejudice is not enough to justify the granting of the extension • whether the decision will unsettle people other than the Commissioner or unsettle established practices • whether it is fair to people in similar positions and the wider public interest • whether there is any mischief involved, and • the consequences of granting the extension. In this case, the assets were sold more than 2 years after the deceased's death. Since the sale occurred after the time limit expired, the estate will only be able to access the small business concessions if the Commissioner grants an extension of the time limit. The delay in disposing of the deceased's asset was not the estate's fault. The estate entered into negotiations to dispose the asset, however due to delays on the purchaser's side, the asset was sold X months after the 2-year limit expired. The extension requested is for X months. There is an acceptable explanation for the extension requested and it is fair and equitable in the circumstances to grant the extension. There appears to be no prejudice to the Commissioner. The decision to grant the extension is fair to those in similar positions and the wider public interest. There does not appear to be any mischief involved and no ill consequences resulting from the extension being granted. Having considered these factors and your circumstances, the Commissioner will exercise the discretion in subsection 152-80(3) of the ITAA 1997 to extend the time limit.