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Edited version of private advice
Authorisation Number: 1051633037050
Date of advice: 6 February 2020
Ruling
Subject: Capital gains tax - Deceased estate - request for an extension to the two year period
Question
Will the Commissioner allow an extension of time to DD MM YYYY 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 ending 30 June 2020
The scheme commenced on:
1 July 2019
Relevant facts and circumstances
The deceased individual (the deceased) passed away in 20XX.
The deceased acquired an ownership interest in a residential dwelling (the property) after 20 September 1985.
The property was the deceased's main residence just before their date of death.
The property has not been used to produce assessable income following the deceased's death.
The property is less than two hectares in size.
The deceased's adult child, another individual and Accountant are executors and trustees of the deceased's will.
Under the will, the deceased bequeathed an equal share of the property to their adult children.
Probate was granted a couple of months following the deceased's date of death.
The property has remained in the estate post grant of probate.
Within six months of the deceased's date of death, one of the deceased's adult children challenged the will, as they felt that they had not been adequately provided for given their own personal circumstances.
The matter was heard in the Supreme Court, with the Supreme Court orders being issued in late 20XX.
The outcome of the matter was that the court awarded a large sum of money to the deceased's adult child who challenged the will.
The executors engaged a Real estate firm in mid- 20XX to undertake the sale of the property, and the property was widely advertised through an advert board on site, local newspaper and on the internet shortly following this.
The property went to auction in late 20XX and was passed in. No offers were subsequently made.
There were several attempts to sell the property and every effort was made to ensure that a sale would occur, however the property was a difficult to one sell due to its unusual nature and building design.
The property remained vacant throughout the sale process to maximise the ability of the appointed real estate agent to show the property to potential buyers.
The property was finally sold in mid- 20XX for a significant amount below the certified valuation.
Independent market appraisals were obtained along with statements of advice. The appraisals were relied upon throughout the sale process including the failed auction.
Settlement was completed a couple of months later, in the 2019-20 financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195