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Edited version of your written advice
Authorisation Number: 1051494118167
Date of advice: 14 March 2019
Ruling
Subject: Capital gains tax – deceased estate – Commissioner’s discretion to extend the two year period to dispose of an inherited dwelling.
Question
Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two year period?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au
This ruling applies for the following period:
Year ending 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
The deceased acquired a property (the dwelling).
The deceased passed away.
The dwelling was the deceased’s main residence at the time of death.
Probate for the deceased’s will was granted six months after the deceased’s death.
The deceased’s will, appointed two of the deceased’s children as executors.
The will gave one child a right to reside in the dwelling until it was sold.
The dwelling was not used to produce assessable income.
The deceased’s will left the dwelling to her children, A, B C & D.
The executors agreed for A and B to buy C and D’s share in the dwelling.
In order to buy C and D’s share of the dwelling, B put their house (B’s Property) on the market.
The property downturn impacted the sale and B’s Property was passed in at auction without any bids.
Some improvements were made to B’s Property (including painting and new carpet) and it was put on the market again.
B’s Property was passed in at auction again.
B received an offer.
Settlement for B’s Property occurred 2 years and 5 days after the deceased’s death.
A contract of sale for the deceased’s dwelling was entered into with settlement occurring with the funds from the settlement from B’s Property.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 subsection 118-130(3)
Income Tax Assessment Act 1997 section 118-195
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