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Edited version of private advice
Authorisation Number: 1051633132967
Date of advice: 19 February 2020
Ruling
Subject: Extend the two year period to sell an inherited dwelling
Question
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?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Therefore, you do not need to declare any capital gain that you may have as a result of the sale of the property. 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 20XX.
The scheme commences on
1 July 20XX.
Relevant facts and circumstances
The Deceased purchased the property after XX September 19XX (the Dwelling).
Many years later the Deceased passed away.
The Dwelling was the Deceased's main residence at the time of their death.
The Dwelling was not used for income producing activities and no income has been received from the Dwelling after the passing of the Deceased.
Under the terms of the Last Will and Testament of the Deceased:
· You were appointed Executor and trustee of the Deceased's estate;
· The Deceased's relative, relative and You, were permitted to reside in the Dwelling free of charge for as long as they wish to do so during their lifetime;
· But upon the death of the relative and relative the Dwelling shall be given to the following beneficiaries as tenants in common in the following portions:
˗ The Deceased's relative XX%;
˗ The Deceased's relative XX%; and
˗ You XX%.
Less than a year after the deceased passed away Probate was granted. A few years after probate was granted the Deceased's relative passed away. Soon after the passing of his Spouse the deceased's other relative agreed to give up their right to live in the Dwelling and start living with You. A short time later after the death of the relative settlement occurred on the Dwelling. You made a small capital gain on the sale of the Dwelling.
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)