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Edited version of private advice
Authorisation Number: 1051615081918
Date of advice: 29 November 2019
Ruling
Subject: Capital Gains Tax
Question
Will the Commissioner allow an extension of time to 15 February 2019 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 2020
The scheme commences on:
1 July 2019
Relevant facts
The deceased passed away 20xx.
Settlement of the property was 20xx.
Property has been owned by the deceased's family for over 100 years. The property was used only as a family home.
When the property was bequeathed to the beneficiary it was in a significant state of disrepair. No changes had been made since the 19xx
The deceased was not able to maintain the property as they were ill some time before their passing.
The house was not able to be lived in and as a result also not rented out.
The beneficiary was advised by multiple real estate agents that it would not sell without renovations. Within a period of x months, they spent in excess of $x in renovations. Including necessary repairs and some renovation. The beneficiary also states that during this time it was one of the worst downturn markets in history meaning they had already suffered x% hit to the value.
Although the house was not intended to be lived in by the family, the beneficiary resided on a temporary basis to watch over the renovations and undertake internal painting to keep costs down.
The house was soft marketed from 20XX as they were still finalising renovations.
An offer had been made in the months prior of the 2 year anniversary, however the purchaser was disposing of their own property and this process dragged on to the point until they withdrew their offer.
More offers were received, however due to the economic downturn, many struggled to secure financing and subsequently offers fell through.
While no formal legal proceedings resulted from the death, the stepchild was subjected to ongoing advice from the deceased's sibling to the effect that they would proceed with a legal challenge to the estate. The spouse of the beneficiay, the executor for the estate, was also subjected to criticism and claims by the sibling, resulting in raised stress to the family.
20xx the beneficiary's child had to undergo major surgery.
Within in the same year of the death, the beneficiary also had to deal with their own parent passing in 20xx.
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