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Edited version of your private ruling
Authorisation Number: 1012503287581
Subject: Capital gains tax - Deceased estate - extension of two year rule - disposal
Question:
Would the Commissioner exercise the discretion in section 118-195 of the Income Tax Assessment Act 1997 in your particular circumstances?
Answer:
No.
This ruling applies for the following period:
Year ended 30 June 2014
The scheme commenced on:
1 July 2013
Relevant facts:
Your parent passed away after 20 September 1985 and you are the executor of their estate.
The deceased acquired a property.
The property has not been used to produce assessable income.
The property has been occupied by family members for periods of time.
The property has been listed for sale; however you have not received any suitable offers to purchase the property due to unfavourable real estate conditions.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 118-195
Reasons for decision:
Due to recent changes to the Income Tax Assessment Act 1997 (ITAA), the Commissioner now has discretion to extend the two year period in the Act where:
· The ownership of a dwelling or a will is challenged;
· The complexity of a deceased estate delays the completion of administration of the estate;
· A trustee or beneficiary is unable to attend to the deceased estate due to unforeseen or serious personal circumstances arising during the two-year period (for example, the taxpayer or a family member has a severe illness or injury); or
· Settlement of a contract of sale over the dwelling is unexpectedly delayed or falls through for circumstances outside the beneficiary or trustee's control.
These examples are not exhaustive.
In this case, you were unable to dispose of the property within two years of the deceased's death due to unfavourable real estate conditions. Accordingly, you do not meet the criteria in which the Commissioner may exercise discretion to extend the two year period in which a deceased's main residence must be disposed.