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Edited version of private advice

Authorisation Number: 1051792689638

Date of advice: 23 December 2020

Ruling

Subject: Commissioner's discretion to extend the two year time limit to dispose of a dwelling

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. 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 ended 30 June 20XX

The scheme commences on

1 July 20XX

Relevant facts

The deceased acquired a dwelling. (The dwelling).

The deceased passed away in 20XX. (The deceased)

The dwelling had been the deceased's main residence prior to passing away.

The will of the deceased provided a life interest in the dwelling to their spouse (A)

The dwelling was occupied by A until they passed away in 20XX.

A trustee of the estate of A who was also a child of the deceased, passed away a short period of time afterwards.

This created a more complex administration as the remaining family members where required to effectively administer numerous estates concurrently. New trustees were required to be appointed.

There were numerous properties within the estates to administer and this caused some delays in administering the sale of the dwelling.

The trustees appointed legal representatives to assist and during the administration process a number of separate legal representatives were involved and this caused some delays.

The dwelling was vacant from the date of death of A and as a result some repairs were required to be undertaken.

The trustees were required to raise the funds personally to complete the repairs and ready the dwelling for sale.

The dwelling was placed on the market in 20XX and at this time an error was noted on the title to the dwelling. This caused delays whilst this issue was resolved.

COVID-19 also impacted on the trustees ability to market and sell the dwelling.

A contract was entered into in 20XX.

Settlement occurred a short time later.

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

Income Tax Assessment Act 1997 subsection 118-195(1)

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