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Edited version of private advice
Authorisation Number: 1052259954771
Date of advice: 7 June 2024
Ruling
Subject: Downsizer contribution
Question 1
Does your ownership interest in the property satisfy the 10-year ownership condition of subsection 292-102(2) of the Income Tax Assessment Act 1997 (ITAA 1997) for the purposes of applying the downsizer contribution to the proceeds of the property's disposal?
Answer
Yes.
You have retained beneficial ownership of the property since you purchased it. The transfer of legal title to your relatives under their Enduring Power of Attorney did not confer beneficial ownership as it was performed under an invalid legal instrument, proven by the subsequent cancellation of the transfer by the relevant Titles Office.
Therefore, your ownership interest in the property satisfies the 10-year ownership condition of subsection 292-102(2) of the ITAA 1997 for the purposes of accessing the downsizer contribution.
Question 2
Will the Commissioner grant an extension of time to allow you to make the downsizer contribution as provided for in paragraph 292-102(1)(g) of the ITAA 1997?
Answer
Yes.
The reason for the delay was outside of your control as you required the Commissioner to assess your eligibility for the downsizer contribution. Therefore, the Commissioner will grant you a 12-month extension of time to make the contribution.
This ruling applies for the following periods:
Year ending 30 June 20xx
Year ending 30 June 20xx
The scheme commenced on:
1 July 20xx
Relevant facts and circumstances
You purchased a property over 30 years ago.
You have lived in the property as your main residence at all times since you purchased it.
Around ten years ago you executed an Enduring Power of Attorney (EPA) authorising your two relatives to be your joint and several attorneys.
On the day that you executed the EPA the transfer of title for the property from you to your two relatives was executed.
A few months later, after reviewing the EPA; the relevant administrative authority revoked the enduring power of attorney and declared it to be invalid.
Sometime after the EPA was invalidated, the Supreme Court in your state ordered that the transfer of the property to your relatives be cancelled and re-recorded in your name.
Sometime after that the Land Titles Office in your state cancelled the transfer of title to your sons and reinstated you as the title holder of the property.
You sold the property, with settlement occurring 1 March 2024.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 292-102
Income Tax Assessment Act 1997 paragraph 292-102(1)(g)
Income Tax Assessment Act 1997 subsection 292-102(2)