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Ruling

Subject: capital gains tax - deceased estate - Commissioner's discretion to extend the two-year period - main residence exemption

Question: Would the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) in your particular circumstance?

Answer: Yes.

This ruling applies for the following period

To certain month 20XX

The scheme commences on

30 June 2013

Relevant facts and circumstances

Prior to 20 September 1985, the deceased acquired a property.

The deceased established the property as their main residence.

The property has never been rented out.

The deceased died approximately three years ago intestate.

The deceased had children and has been married a number of times and was in a relationship with their current partner, person A.

Person A applied to the court to be appointed as the administrator of their estate.

There followed various events including family disputes and legal matters which had to be resolved. The property was finally ready to be sold in the recent year.

The property was sold in the recent year.

You have supplied copies of documentation to support your application and this documentation is to be read with and forms part of your application for the purpose of this ruling.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 118-195.

Reasons for decision

While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.

Due to recent changes to section 118-195 of the ITAA 1997, the Commissioner now has discretion to extend the two-year period in the Act where:

· the ownership of a dwelling or 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 unforseen 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 for sale over the dwelling is unexpectedly delayed or falls through or circumstances outside the beneficiary or trustee's control.

In your case, due to a number of factors such as:

· the deceased dying intestate

· the numerous caveats placed on the property, and

· numerous issues with the deceased's family which were dealt with by the Supreme Court of an Australian state

you were unable to dispose of the property within two year's of the deceased's date of death.

Accordingly, you meet the criteria in which the Commissioner may exercise his discretion to extend the two-year period in which a deceased's main residence must be disposed of.

The Commissioner considers it appropriate to exercise his discretion on this occasion and allow until the date of settlement.