Private ruling: Commissioner's discretion
Date of advice: 29 May 2017
Published: September 2017
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Will the Commissioner exercise his discretion under paragraph 103-25(1)(b) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you an extension of time to make a choice to apply the small business capital gains tax concessions contained in Division 152 of the ITAA 1997? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under paragraph 103-25(1)(b) of the ITAA 1997 and allow an extension of time until 30 June 2017 to make the choice to apply the small business concessions. More information on the small business concessions can be found in the publication Advanced guide to capital gains tax concessions for small business 2011-12 (NAT 3359).

Relevant facts and circumstances: You incurred a capital gain on the disposal of a property that you intended to elect to disregard under the retirement exemption after the application of the small business 50% reduction. The contract for sale was signed in one financial year, however settlement did not occur until the following financial year. Due to an oversight by your former tax agent, the capital gain was not recognised in the correct income tax return, therefore the small business CGT concessions were not considered. Your former tax agent was not aware that the contract of sale was signed in the earlier financial year and you were unaware that the capital gain was to be recognised in the financial year in which the contract is signed. Upon preparing your tax return for the following, it came to the attention of your new accountants that the capital gain on the sale of the property had not been accounted for and as such the small business CGT concessions had not been considered.

Relevant legislative provisions: Income Tax Assessment Act 1997 paragraph 103-25(1)(b)