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Edited version of private advice
Authorisation Number: 1051575337028
Date of advice: 11 September 2019
Ruling
Subject: CGT deceased estate
Question
Will the Commissioner exercise his discretion to extend the two year period under section 118-195 of the Income Tax Assessment Act 1997 for a property situated in Australia?
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 periods:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased died in Autumn 20XX, some years ago.
The property situated in Australia was purchased by the deceased prior to the introduction of capital gains tax.
The Will of the deceased included a provision to allow their spouse to remain living at the property during their lifetime.
The property was used as the main residence of the deceased until death, following which the spouse remained living in the property until their death in Spring 20YY.
The property was vacant from the death of the owner's spouse until the sale of the property; with settlement in late 20ZZ.
After the death of the property owner's spouse, the beneficiaries of the Will were unable to agree on a family settlement in relation to distribution of the assets of the estate. The various parties engaged solicitors and eventually a mediation meeting resulted in all beneficiaries signing a deed of family settlement.
All necessary balancing adjustment payments under this deed were paid recently. It was only after these payments were made that the property could be offered for sale.
In the period after the death of the property owner the beneficiaries were also advised that the Will would require rectification. They applied for this to occur and a rectified Will was recently issued by the Supreme Court.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 118-195(1)