Edited version of private advice

Authorisation Number: 1051702217548

Date of advice: 18 June 2020

Ruling

Subject: Commissioner's discretion to extend the two-year time limit to dispose of a dwelling

Question

Will the Commissioner exercise 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 the relevant facts, the Commissioner will apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension to the two-year time limit until the settlement date.

This ruling applies for the following period:

Ruling end date 30 June 20XX

The scheme commences on

1 July 20XX

Relevant facts and circumstances

The deceased (the Deceased) passed away.

The Deceased left a will (the Will) appointing the Public Trustee of a state as the executor and trustee of the estate (the Trustee).

According to the Will, the Deceased left all the residue of the estate, including the main residence owned solely by the Deceased (the Property), to their spouse (the Spouse), if the Spouse survived the Deceased by a period of thirty days. If that condition was not satisfied then the residue would go to children.

The Spouse survived the Deceased by more than thirty days and thus became the sole beneficiary of the deceased estate.

The Property continued to be the Spouse's main residence until the Spouse passed away. Only then did the Trustee become aware of the Deceased's death.

Probate for the estate was granted and the Trustee immediately proceeded to sell the estate's remaining asset, the Property, which was at that point of time still registered under the Deceased's name.

The property was sold for $XX and the sales contract was exchanged.

The value of the property at the Deceased's death was $XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 118-195(1)