Edited version of private advice

Authorisation Number: 1052384974458

Date of advice: 16 June 2025

Ruling

Subject: CGT - extensions to the 2-year ownership period

Question 1

Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time for you to dispose of your ownership interest acquired in the dwelling and disregard the capital gain or capital loss you made on the disposal?

Answer 1

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 ato.gov.au for

'QC 6605'

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

The deceased and the deceased's spouse purchased the property as joint tenants after September 1985.

The property is situated on less than 2 hectares. The house on the property was always their main residence and was never used to produce assessable income.

The deceased's spouse passed away before the deceased. The deceased became the sole owner of the property as the surviving joint tenant.

The deceased entered a nursing home. The Trustee chose on behalf of the deceased to continue to treat the property as their main residence.

The deceased passed away leaving no Will.

The deceased was survived by their 3 children. Child A lived at the house.

Shortly after, the deceased's children instructed Lawyer A to administer the estate.

Months later, Lawyer B applied for the deceased's Death Certificate.

Over the next few months, Lawyer B forwarded correspondence to the Trustee and placed an advertisement notice seeking any law firms that may have been engaged in the matter.

Lawyer B gazetted a notice to see if there was any Will in existence for the deceased and obtain instructions as to the family members entitled to renounce and apply for Letters of Administration.

The deceased's Child B passed away and Child C entered permanent care. Consequently, Lawyer B encountered difficulties in locating a person entitled to apply for letters of administration and were advised:

•                The deceased's spouse is deceased

•                The deceased's children - 1 is deceased and 2 have administration orders but no enduring power of attorney.

•                The deceased's parents are deceased.

•                The deceased's siblings are deceased.

•                The deceased's grandparents, aunts, and uncles are all deceased.

During the period of almost 2 years, Lawyer B attended to the estate. The Trustee provided an invoice detailing their services:

Lawyer B requested the Trustee apply for Letters of Administration as they were unable to identify an entitled person.

The Trustee was granted Letters of Administration by the Court.

The Trustee received advice from the office representing Child A, of their intention to pursue a "right to reside" claim on the property (the Application).

Lawyer C filed the Application on Child A's behalf.

The Trustee referred the Application for legal advice.

The Trustee attended a directions hearing.

Child A vacated the house and entered permanent care. They had lived in the house since birth.

Lawyer C prepared a deed of family arrangement (the Deed).

The parties attended a Court appointed mediation and agreed to resolve the Application and any other claims by any party as set out in the terms of the Deed.

The Trustee and the other parties signed the Deed.

The Trustee arranged to sell the property and obtained an appraisal. The Trustee received emails expressing the family's intent to purchase the property, along with other private offers.

A private buyer withdrew their offer.

During the selling period, the Trustee obtained an updated appraisal and notified relevant solicitors about listing the property.

The Trustee listed the property for sale.

The Trustee sold the property.

The property sale settled.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195

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