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Edited version of private advice
Authorisation Number: 1052029698922
Date of advice: 7 October 2022
Ruling
Subject: CGT - 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 made on the disposal of the dwelling and adjacent land (up to 2 hectares including the land area immediately under the dwelling)?
Answer
Yes.
Having considered your circumstances and the relevant factors the Commissioner will allow an extension of time. Further information about the Commissioner's discretion can be found by searching 'QC 66057' on ato.gov.au.
This ruling applies for the following period:
Year ended 20XX
The scheme commences on:
In the year beginning 1 July 20XX
Relevant facts and circumstances
The deceased passed away in 20XX.
The deceased acquired the property before 20 September 1985 jointly with their spouse. The property consisted of more than 2 hectares including the area immediately under the dwelling.
The property was the main residence of the deceased throughout their ownership period.
The deceased's spouse passed away in 20XX and their ownership interest passed to the deceased. Leaving the deceased with 100% ownership interest holding 50% pre-CGT and 50% post CGT.
The property was not used to produce assessable income at the time of the deceased's death.
The deceased appointed two executors and trustees of her estate (A and B).
In 20XX executor B was removed by the Court, and executor A continued to administer the deceased's estate solely in their capacity.
The executor engaged a local realtor to market the property for sale to potential buyers and/or developers.
During the marketing campaign a potential property developer informed the realtor and executor that there was a right of way (ROW) attached to the legal title.
The realtor and executor were not aware this ROW existed when preparing the property for sale.
2 potential contracts of sale fell through because of various conditions attached to the contracts (including having the ROW removed), as well as the purchaser's offer being beneath the market value of the property.
The executor has the ROW removed, and this takes longer than anticipated and is completed more than 12 months later.
A contract of sale is prepared and executed in 20XX.
Settlement occurs in 20XX, and property disposed of close to 3 years post the deceased's death.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 118-195
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