Private ruling: Small business concessions
Date of advice: 12 August 2025
Published: 20 October 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 19XX

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit until XX February 20XX to allow the small business capital gains concessions to be applied to the sale of the 50% interest in Property 1? | A1: Yes | Q2: Will the Commissioner exercise the discretion under subsection 152-80(3) of the ITAA 1997 to extend the time limit to allow the small business capital gains concessions to be applied to the sale of the interests in Property 2? | A2: Decline to rule

Relevant facts and circumstances: On X October 19XX the individual acquired a X% interest in Property 1. The individual passed away in April 20XX. On X February 20XX, the executors of the Estate were granted probate. The remaining XX% interest in Property 1 was held in the individuals spouse's estate. The original executors of this estate had passed. The children made an application for letters of administration in relation to the unadministered assets of the individual's spouse's estate, including the X% interest in Property 1. This was a complex application that required consent from family. The letters of administration for the individual spouse's estate were granted on X January 20XX. The boundary for Property 1 were not known. It had to be surveyed to determine where the land title started and finished. Property 1 had a boundary encroachment issue where a neighbour had contracted a shed partially on the property. This had to be resolved through legal conveyancing before proceeding with sale. The area Property 1 is located was affected by the 20XX bushfires. Property 1 was sold on X February 20XX. The net value of the individual CGT assets including entities connected with XX, any affiliates of XX's and entities connected to those affiliates in less then $X immediately prior to the individuals death. The individual carried on a livestock business as a sole trader on Property 1.

Relevant legislative provisions: Income Tax Assessment Act 1997, section 152-80.

Reasons for decision: Detailed Reasoning - Detailed reasoning: Section 152-80 of the ITAA 1997 explains that the beneficiaries of a trust established by the will of a deceased individual can apply the small business CGT concessions in the same way the deceased would have been entitled to immediately before their death in respect of the sale of the deceased's CGT assets. For the beneficiaries to apply the small business CGT concessions in the same way as the deceased would have been entitled to the asset must: • Form part of the deceased estate; and • The CGT asset must happen to that asset within 2 years of the individuals death. The Commissioner can exercise discretion and extend the 2-year time limit (subsection 152-80(3)). In determining whether to allow a longer period, the Commissioner will consider a range of factors such as: • 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 provide such an extension. • Whether there is any prejudice to the Commissioner if the additional time is allowed (however, the mere absence of prejudice is not enough to justify the granting of an extension). • Whether there is any unsettling of people, other than the Commissioner, or of established practices. • The need to ensure fairness to people in like positions and the wider public interest. • Whether there is any mischief involved, and • The consequences of the decision. Application to your circumstances Property 1 could not be sold within two years of the individuals passing due to the complex ownership structure, which involved interests held across two separate estates. The individuals' spouses' estate experienced further delays, which impacted the sale of Property 1, as the original executors of the individual's spouses' estate had passed away, and new Letters of Administration were not granted until 20XX. The delays caused by the conveyancing issues from a shed being built across the boundary, the boundaries of the property being unknown, and the property being affected by bushfires further explain the delay in the sale of the property until XX February 20XX. After taking into consideration the above circumstances the Commissioner will allow an extension of time until XX February 20XX as per subsection 152-80(3) of the ITAA 1997. | Detailed Reasoning - Question 2 - Detailed reasoning: We will not make a private ruling in relation to your request, on behalf of the Estate about capital gains tax, as discussed. This is because we will not make a ruling based on certain assumptions and the accuracy of your ruling would depend on the following assumptions: • Who originally acquired the asset. • What interests were held in the asset at the time of sale. The Commissioner does not believe that further information can be sought to find basis on which the Commissioner could make all necessary assumptions to make a decision on the questions raised in the private ruling application. Therefore, the Commissioner has decided to decline to rule on the application in accordance with paragraphs 359-35(2)(a) and 357-110(1)(a) of Schedule 1 to the Tax Administration Act 1953 (TAA).