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Edited version of your written advice
Authorisation Number: 1051256925497
Date of advice: 22 July 2017
Ruling
Subject: Capital Gains Tax and the Commissioner's discretion to extend the two year period
Question 1
Can you disregard any capital gain or loss that arises from the disposal of the property under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes
This ruling applies for the following periods:
Year ended 30 June 2017
The scheme commences on:
1 July 2016
Relevant facts and circumstances
The deceased passed away on X January 20XX
The deceased owned a property that had always been the deceased’s principal place of residence and had never been used for income producing purposes.
The property was purchased by the deceased and their late spouse in 19XX.
Under the terms of the deceased’s Will, the deceased’s child had the right of occupancy of the property for as long as the child wishes, provided that the child pays the rates and taxes, insurance premium and maintains the property to the satisfaction of the Executors satisfaction.
When, in the opinion of the Executor, the deceased’s child had ceased to live in the house permanently, the property would be bequeathed to the deceased’s children and step children that survive the deceased in equal shares.
The deceased’s child lived at the property until X January 20XX.
The property has now been sold.
The Executor is yet to distribute the proceeds of the sale to the respective beneficiaries.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-195(1).
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