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Edited version of private advice
Authorisation Number: 1051650859149
Date of advice: 27 March 2020
Ruling
Subject: Commissioner's discretion for an extension to the two year period
Question
Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard part of 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
Further information
Subsection 118-120(3) of the Income Tax Assessment Act 1997 (ITAA 1997) specifies the maximum area of land covered by the main residence exemption (including the area under the dwelling) must not exceed two hectares. As the property is greater than two hectares in total, only the capital gain relating to the two hectares which includes the main residence dwelling, will be exempt under subsection 118-195(1) of the ITAA 1997.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
An individual passed away.
The property was the Deceased's principal place of residence.
The property was greater than two hectares in size.
Probate was granted.
The beneficiaries inherited the property from the Estate.
An initial contract was entered within two years of the Deceased's death. Settlement did not occur.
The property was re-marketed. Another buyer was found and settlement occurred within 12 months of the expiration of the two-year period.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 subsection 118-120(3)
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)