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Edited version of private advice
Authorisation Number: 1051669319645
Date of advice: 30 April 2020
Ruling
Subject: The exercise of the Commissioners discretion to extend the two year time limit for capital gains taxation and deceased estate
Question
Will the Commissioner allow an extension of time to February 2020 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 and circumstances
The deceased acquired a property (the dwelling) in xx xxxx (prior to 20 September 1985).
The deceased passed away on xx xxx xxxx and did not have a spouse or children.
The deceased resided in a nursing home at the time of death.
The dwelling was not the main residence of the deceased.
In 20xx an extended family member notified a local Solicitors office of the deceased's death. ('A')
'A' advised that they held a will made in 20xx in which the deceased appointed 'A' as executor. (Will 1)
Further investigation was undertaken and a subsequent will made by the deceased in 20xx was located and which named 'B' a relative by marriage as the executor. (Will 2)
A dispute ensued in relation to Will 2 as the executor of Will 1 considered that the deceased lacked testamentary capacity at the time of drafting Will 2.
The beneficiaries named in both Wills are different.
A writ to prove Will 1 was filed in 20xx and was issued by the relevant Court in January 20xx.
The dispute took some time to resolve and ultimately the executor of Will 1 was able to administer the estate and was granted the power by the Court to sell the dwelling around the middle of 20xx.
The property was then able to be listed for sale.
The administration of the Estate has been quite complex which meant that the property was unable to be sold within the two year period.
A Grant of Probate is still not issued pending the outcome of the Action.
The property has now been sold with settlement occurring on x xxx xxxx.
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)