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Edited version of private advice
Authorisation Number: 1051847244669
Date of advice: 14 June 2021
Ruling
Subject: Capital gains tax - extension to the two-year period
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
Year ended 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased died during the year ended 30 June 20XX.
The property was the deceased's main residence from purchase until his date of death.
The property is situated on half a hectare within a designated area to be re‐zoned by the council.
The property was valued for probate purposes at $X.
Probate was granted X months after the deceased's death.
The property was listed for sale X after the deceased's death.
The nature of the property precluded the ordinary home purchaser due to the size of the property and its development potential.
Accordingly, most interest for the purchase was from developers from whom the offered price was equal to or in excess of the probate value. Offers from individual home buyers were below probate value.
Due to the potential re‐zoning likely on offer to the prospective purchaser and the current over supply of unit dwellings in area, developers from whom interest was received all required an extended settlement period.
Accordingly, the executors, in ensuring the property was sold at its fair value, were restrained in the sales terms as demanded by purchasers.
Contract for sale was exchanged one year and nine months after the deceased's death. The purchase price is $X.
The purchaser has requested a settlement period of X months such that final settlement will be after the two-year period has expired.
The purchaser has confirmed in writing that the contract is binding.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195