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Edited version of private advice
Authorisation Number: 1051793257667
Date of advice: 23 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 20xx. (The deceased)
The dwelling had been the deceased's main residence prior to passing away.
The executors of the estate became aware of the existence of two wills left by the deceased. A delay was experienced as they were unsure of who had custody of the wills. The executors contacted the deceased's previous lawyers who advised that they held a will of the deceased. (Will 1)
Will 1 listed the estranged spouse of the deceased as the beneficiary and named the deceased's sibling as an executor. The sibling of the deceased had passed away before the deceased and the estranged spouse of the deceased denied being a beneficiary and advised that there must be a latter will.
Further investigations were undertaken by the deceased's lawyers who advised that they may have used another legal firm to do some of the work and enquiries should be made with them. This caused further delays.
A second and later will was eventually located. (Will 2)
An application was subsequently made for probate.
The executors experienced delays in locating the title to the dwelling. It was initially thought that the deceased's bank held the title as there was a mortgage previously. However, after a thorough investigation the bank advised that they did not hold the title.
The deceased's personal affairs took considerable time to organise and it was during this process that correspondence from the deceased's lawyers who advised that they held the title to the dwelling.
Once this was resolved, the dwelling was prepared for sale and listed for auction.
Settlement occurred shortly afterward.
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)