Edited version of private advice

Authorisation Number: 1051768361032

Date of advice: 15 October 2020

Ruling

Subject: Capital gains tax - deceased estate - two year discretion

Question

Will the Commissioner exercise the discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time until settlement date?

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 ending 30 June 2020

The scheme commences on:

1 July 2019

Relevant facts and circumstances

The Deceased owned a property (The Property). They purchased this property in the 19XXs, and it was their main residence until their death. The total size of The Property is 0.085 hectares.

Between the time of The Deceased's death and the settlement of The Property, The Property was vacant.

The Deceased's Will appointed you as Trustee for their Estate. As part of this process, you and your sibling agreed that you would sell The Property.

Due to the circumstances of The Deceased's death, their case had to be referred to a specific Court. The proceedings relating to this Court took many months to resolve. The Supreme Court would not grant probate until these proceedings were finalised.

Probate was granted shortly after proceedings were finalised.

Over several months in 20XX, you exchanged emails with your solicitor regarding your plans for sale of The Property.

In the next month, your solicitor provided you with advice regarding sale of The Property.

Shortly after, you advised your solicitor that you wished to sell The Property.

Your solicitors then spent time considering the requirements for transfer to you and subsequent sale of The Property. As they had previously not used eConvenyancing, they were deciding whether to use an interstate agent for your transfer and property sale or to register for the required electronic system.

Your solicitor decided not to register for the electronic system but instead used an interstate-based agent to undertake the electronic transactions. This resulted in some delays in relation to the transfer of The Property.

You followed up with your solicitor regarding the transfer of The Property into your name. They advised that they were preparing the required forms and arranging for an interstate agent to lodge them.

Over the next few months, your solicitor contacted an interstate agent as to the required documents and transmission forms to lodge the transfer application.

Following this, you attended your solicitor's office and signed the transmission form for transfer of The Property.

Your solicitor received the Certificate of Title for The Property. Several weeks after this, you attended your solicitor's office and received the Certificate of Title for The Property.

The Property was then listed with a real estate agent for sale. Settlement occurred shortly thereafter.

Relevant legislative provisions

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