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Edited version of private advice
Authorisation Number: 1051589798524
Date of advice: 4 October 2019
Ruling
Subject: CGT - 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 periods:
Financial Year ended 30 June 201X
Financial Year ending 30 June 20XX
The scheme commences on:
1 July 201X
Relevant facts and circumstances
The deceased passed away in 201X.
The only real property owned by the deceased was the deceased's main residence (the dwelling), a post capital gains tax asset.
The dwelling has never been used to produce assessable income at any time during the deceased's ownership period or since death.
The deceased moved into a nursing home prior to their death.
The executors made the choice under section 118-145 of the Income Tax Assessment Act 1997 (ITAA 1997) to continue to treat the dwelling as the main residence of the deceased during their absence period up until their death.
The deceased left a valid Will and probate was granted to the executors appointed under the will in 201X.
Subsequent to the grant of probate the deceased's long-term de facto spouse, bought proceedings in the Supreme Court (the court) for provision for themselves out of the deceased's estate.
Consent orders were made by the court granting the de facto spouse the right of residence in the deceased's main residence for a specified period of time.
Shortly thereafter, the property title was transferred into the executor's names as joint tenants.
After the specified period of time awarded to the de facto spouse passed, they vacated the dwelling.
The property was then listed for sale and a contract was entered into shortly thereafter. Settlement has taken place.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-195(1)