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Edited version of your written advice
Authorisation Number: 1051371913111
Date of advice: 4 June 2018
Ruling
Subject: CGT – deceased estate – main residence exemption – 2 year extension
Question:
Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two year time limit to X XXXXXXX XXXX to disregard the capital gain or loss made on disposal of the property?
Answer;
Yes.
Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time until X XXXXXXX XXXX.
This ruling applies for the following periods:
Year ending 30 June 201x
Year ending 30 June 201x
The scheme commenced on:
1 July 201x
Relevant facts and circumstances
The deceased died a few years ago.
One of the main assets of the estate was the house (the property). This was the principal residence of the deceased up until the deceased death.
The property was acquired as joint tenants prior to 20 September 1985.
The deceased became the sole owner of the property upon the death of their spouse.
The property was vacant from the deceased death until the property was sold.
The property has never been used to produce assessable income.
The Deceased left a Will.
The Executor of Will is a family member.
The Will of the Deceased relevantly provided that:
● the deceased devise and bequeath all their real and personal property under the Will to be held on trust for the Trustee for a number of family members in equal shares as tenants in common.
● Under sub-clause X (a) of the Will the deceased gave the Trustee the powers to sell, call in and convert to money the property of the estate in such a manner and upon terms as the Trustee shall think fit with the power to postpone such a sale or conversion for a long as the trustee shall in his uncontrolled discretion deem proper and to do so without the responsibility of any resulting loss.
A number of the Executor’s family members passed away which required the executor to attend to estates of the deceased family members.
Probate was granted by a court.
The property was advertised for sale shortly after probate was granted.
A contact of sale for the property was signed and entered into a purchaser.
The delay in disposing of the property within the two year time limit arose as a result of the purchaser's inability to secure finance for the sale of the property and ongoing negotiations and discussions with the Purchaser to settle the contract.
Settlement of the property was on X XXXXXXX XXXX.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-195(1)
Income Tax Assessment Act 1997 section 118-195
Reasons for decision
The Commissioner will exercise his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time until X XXXXXXX XXXX.