Edited version of private advice

Authorisation Number: 1051791366190

Date of advice: 16 December 2020

Ruling

Subject: Capital gains tax - deceased estate

Question

Will the Commissioner exercise his discretion under subsection 118-195 (1) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two-year limit to disregard a capital gain on the sale of the deceased taxpayer's main residence?

Answer

Yes. Having considered your circumstances and the relevant factors, the main residence exemption under section 118-195 of the ITAA 1997 will apply and any capital gain made upon the disposal of the property will be disregarded.

This ruling applies for the following periods:

Year ending 30 June 20XX

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

The deceased purchased a property in 19XX.

The deceased occupied the property as their primary place of residence for the entire period.

The deceased was moved into a retirement home.

The property was not rented out on the basis that there was a possibility that the deceased's health would improve, allowing the deceased to return to the property.

The personal property including furniture, goods, chattels and personal effects remained at the property. The deceased did not acquire a new primary place of residence.

The deceased died on 20XX and Probate was granted.

The executors are actively marketing the deceased's main residence for sale however, the Coronavirus 19 (COVID-19) pandemic has caused delays which has prevented executors travelling to pack up private possessions of the estate which remain at the property.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195