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Edited version of private advice
Authorisation Number: 1051511951820
Date of advice: 8 May 2019
Ruling
Subject: Capital gains tax - deceased estate - 2 year discretion
Question
Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal?
Answer
Yes.
Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts
The deceased acquired an interest in a dwelling.
The deceased passed away in 20XX.
The remaining interest in the dwelling was acquired by ('A') who also resided in the dwelling.
The dwelling was the deceased's main residence.
The deceased's Will provided a life interest in the dwelling to 'A'.
'A' continued to reside at the dwelling.
Legal proceedings were commenced by 'A' approximately one year following the deceased's death.
The legal proceedings were resolved in the fourth year after the deceased's death.
'A' was required to make payments to the deceased's children in relation to the transfer of the deceased's interest in the dwelling.
The executor was delayed in disposing of the deceased's interest in the dwelling until the legal proceedings were resolved.
The deceased's interest in the dwelling was transferred to the executor in the fifth year after the deceased's death
In that year, the deceased's interest in the dwelling was transferred to 'A'.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 subsection 118-130(3)
Income Tax Assessment Act 1997 section 118-195
Income Tax Assessment Act 1997 subsection 118-195(1)