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Edited version of private advice
Authorisation Number: 1051792584221
Date of advice: 22 December 2020
Ruling
Subject: Commissioner's discretion to extend the two year time limit to dispose of a dwelling
Question
Will the Commissioner allow an extension of time 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 20XX
The scheme commences on
1 July 20XX
Relevant facts
The deceased acquired a dwelling. (The dwelling).
The deceased passed away in 19xx. (The deceased)
The dwelling had been the deceased's main residence prior to passing away.
The will of the deceased provided a right to reside in the dwelling to their spouse, ('A')
The will also contained a provision that required the land surrounding the dwelling be subdivided and transferred to a number of beneficiaries.
'A' continued to reside in the dwelling until they passed in 20xx.
The subdivision of the main residence from the vacant blocks of land took longer than expected as the following needed to be achieved before subdivision:
• The local Council and Water authority stated that the following connections needed to be updated to meet their requirements water, electricity and sewerage connections. This took months to correct.
• The local Council stated that part of a shed on a neighbouring property encroached on one of the lots and needed to be rectified for the proposed subdivision. An agreement for boundary extension was reached for the neighbouring property and a boundary line adjustment submitted to the local Council. It was approved however further time was required to resolve issues with subdivision.
• The fencing of the above boundary adjustment affected the run-off of water on the lot. The local Council required landscaping and plumbing to be undertaken to resolve this additional complication. Taking further time to resolve issues with subdivision.
The dwelling is situated in a rural farming town in which many individuals were suffering from financial distress due to the drought. As a result of the market conditions of the region the property was not sold as quickly as expected despite being readily available for sale.
Settlement occurred about two years after A passed away.
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)