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Edited version of private advice
Authorisation Number: 1052072129410
Date of advice: 11 January 2023
Ruling
Subject: CGT - Main residence exemption
Question
Will the Commissioner of Taxation allow for an extension of the two-year rule under section 118-195 of the Income Tax Assessment Act on the sale of the property?
Answer
Yes
Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Practical Compliance Guideline PCG 2019/5 provides the administrators with a safe harbour where the deceased's property cannot be sold and settled within 2 years of the deceased's death. Further information about this discretion can be found by searching 'QC 66057' on ato.gov.au.
This ruling applies for the following period:
Year ending XX June 20XX
The scheme commences on:
XX July 20XX
Relevant facts and circumstances
The deceased solely acquired the property situated at Location on XX/XX/19XX.
The deceased passed away on XX/XX/20XX.
The property area is less than 2 hectares.
The deceased used the property as their main residence from date of acquisition until their date of death and was never income-producing or available for rent.
The deceased did not own any other properties during the ownership period.
There were no capital improvements during the ownership period.
On XX/XX/20XX, the deceased's sibling contacted State Trustees Limited ("STL") regarding the deceased's estate and advised STL that the deceased next of kin is their child who was estranged to the deceased.
The deceased left no will at date of death.
STL got in contact with the deceased child on XX/XX/20XX after a few months of trying to locate them.
On XX/XX/20XX Letters of administration were granted to STL.
Due to COVID-19 restrictions, there was a delay in getting the property cleaned and ready for sale.
STL engaged XXX Real Estate to sell the property on XX/XX/20XX.
The property was then sold on XX/XX/20XX, with settlement occurring on XX/XX/20XX.
The property was listed as soon as practicable after obtaining authority to administer the estate.
STL sold the property as soon as practically possible.
Letters of Administration could only be applied for once we made contact with the next of kin.
If STL were able to get authority from the deceased's estranged next of kin in a timely manner, the property would have been sold and settled within 2 years of the deceased's date of death.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
Practical Compliance Guideline (PCG) 2019/5
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