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Edited version of private advice
Authorisation Number: 1051519229098
Date of advice: 05 June 2019
Ruling
Subject: Capital gains tax
Question 1:
Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two year period in relation to the 50% original interests in the property?
Answer 1:
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
Question 2:
Will the Commissioner exercise his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time to the two year period in relation to the 50% inherited interest in the property lived in as the deceased's main residence?
Answer 2:
Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased and their spouse acquired a property prior to 20 September 1985.
The property consisted of two dwellings, now known as Y and Z (the property).
Y was their main residence.
Z was used to produce assessable income.
The deceased's spouse passed away after 20 September 1985 and their ownership interest passed to the deceased.
The deceased now had four ownership interests in the property.
· the 50% original interest in the dwelling now known as Y
· the 50% original interest in the dwelling now known as Z
· the 50% inherited interest in the dwelling now known as Y, and
· the 50% inherited interest in the dwelling now known Z.
The deceased moved overseas in 20XX.
The dwelling Y was not used to produce assessable income.
While living overseas the deceased lived with relatives who helped care for the deceased as the deceased's health was ailing.
The deceased passed away overseas.
The dwelling known as Y was the deceased's main residence at the time of death by virtue of the absence choice.
Probate was granted eight months after death.
Two of the deceased's relatives, relative B and relative C, were executors of the Estate.
Relative C's ex-spouse applied to the Federal Family Court to include the deceased's estate in their existing divorce proceedings.
The property could not be sold as the court requested the title to the property and held it in its possession.
A ruling was made by the court and the title was released to Relative C.
No improvements were made to the property.
The property was placed on the market in approximately April 20XX. The first offer was accepted and settlement occurred.
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)