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Edited version of private advice
Authorisation Number: 1051561691197
Date of advice: 12 August 2019
Ruling
Subject: Capital gains tax - extension of the two year discretion for deceased estate.
Question
Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal?
Answer
Yes
In this case the complexities that arose in regards to finalising the estate were attributed to the delays in the completion the administration of the estate. These factors were outside your control.
Having considered the circumstances and the factors outlined below, the Commissioner is able to apply his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 and allow an extension of time.
This ruling applies for the following period:
Year ended 30 June 2019
The scheme commences on:
1 July 2014
Relevant facts and circumstances
You and your siblings inherited a property (the dwelling) which was the main residence of the deceased, from before 20 September 1985 until their death.
The house remained uninhabited after their death until it was sold.
The will appointed the deceased's children as executors.
Probate was applied for with an additional affidavit required as one of the executors had died prior to the deceased. Probate was received.
The deceased was a hoarder and the family spent their spare time clearing the house, patio, sheds and grounds.
All rooms of the interior of the dwelling were stockpiled with personal and household possessions with some rooms inaccessible. The dwelling was then refurbished to make bring it up to a marketable standard.
As the dwelling was in a dilapidated condition and the garden overgrown, it required significant repairs to be in saleable condition.
All repairs were carried out by trade professionals and an Electrical Safety Certification was obtained.
The house was put up for sale, an offer was made on the house and a sale price was agreed upon by executors and the purchaser. The sale did not go ahead as the purchasers finance was not approved.
Another offer was accepted by the executors and the sale was settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
Income Tax Assessment Act 1997 section 104-10
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