Edited version of private advice

Authorisation Number: 1051655610875

Date of advice: 06 April 2020

Ruling

Subject: Request for an extension of time to the two year exemption from CGT for a deceased's main residence - non-resident beneficiaries

Question

Will the Commissioner exercise the discretion under 118-195(1) of the Income Tax Assessment Act 1997 and allow an extension of time to the two year period until XXXX 20XX?

Answer

Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time.

This ruling applies for the following period:

1 July 20XX to 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

X (the deceased) was the sole owner of a dwelling located at X (the dwelling). The deceased had purchased the dwelling after 19 September 1985. The dwelling was used as the main residence at the time of death and was not used to produce income prior to death.

The deceased died intestate.

Initially it was thought that the children of the deceased's X were to be the beneficiaries of the estate. This was not corrected until X when a letter was sent to beneficiary A advising they were entitled to apply to the Court to be appointed as Administrator. Beneficiary A is not a resident of Australia and resides in X. Beneficiary A required someone residing in X Australia to obtain a Grant of Letters of Administration.

Other beneficiaries entitled on intestacy, all of whom reside overseas were contacted by beneficiary A and a family meeting was held about X, where it was confirmed beneficiary A would accept the role of Administrator of the Estate.

Beneficiary A contacted Law Firm A and appointed Attorney A. The signed original Enduring Power of Attorney was returned to Law Firm A on or about X.

An updated Death Certificate stating the cause of death was obtained from the Registry of Births, Deaths and Marriages on or about X.

Advertisements for the Grant of Letters of Administration were undertaken on or about X and the Application for the Grant of Letters of Administration filed in Court on X. The Grant was issued on X to x as representative for beneficiary A.

In regards to the property the following occurred:

·         an inventory was taken and potential real estate agents contacted on or about X

·         appraisals were obtained regarding the value of the property X

·         enquiries were made with the local council regarding the status of the council approval of buildings on the property in X

·         in X, some claimants indicated they may wish to acquire the property from the estate and negotiations were had in this regard, however this did not eventuate

·         there was a further delay in the listing of the property, as X indicated interest in purchasing it. Negotiations were held regarding the same, however, it was confirmed X was not in a position to purchase the property

·         in X, sale appraisals were obtained from multiple agents

·         on or about X, the property was transmitted into the name of the Legal Personal Representative

·         on X, a sales agent was appointed to sell the property

·         around X, a potential buyer was located and extended negotiations ensued as to the form of contract relating to special conditions and warranties relating to the buildings on the property

The contract of sale was dated X and settlement occurred X, more than two years after the date that the deceased passed away.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195

Income Tax Assessment Act 1997 section 104-10

ATO Practical Compliance Guideline PCG 2019/5