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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of private advice

Authorisation Number: 1051533797262

Date of advice: 22 July 2019

Ruling

Subject: Capital gains tax and the commissioner's discretion to extend the two year period

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 to XX June 20XX?

Answer

Yes

Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time until XX June 20XX.

Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC17195 into the search bar at the top right of the page.

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 passed away on XX June 20XX.

The deceased owned a property.

The property was the deceased main residence.

The final Will of the deceased named A and B as the executors of the estate.

At the time of the deceased death, B was living in the above residence.

A mortgage was outstanding over the property. It was advised that the property would need to be sold in order to repay the loan in full.

B subsequently advised that they did not consent to the sale of the property, creating a dispute between A and B.

After attempted negotiations failed, probate was granted for the estate and A was appointed an individual executor on XX January 20XX.

Despite obtaining this grant, B continued to refuse to leave the deceased property.

Further legal action was taken to remove B from the property. B was not successfully removed from the property until XX August 20XX.

This caused considerable delay to preparing the property for placement on the real estate market.

A real estate agent was appointed in November 20XX.

A potential purchaser was not located until X April 20XX. Unfortunately this contract fell through.

A subsequent purchaser was located; however this contract also fell through.

A final purchaser was located on XX April 20XX. A contract was signed on May 20XX, with settlement occurring on XX June 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 118-195

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