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Edited version of private advice
Authorisation Number: 1051872333835
Date of advice: 22 July 2021
Ruling
Subject: CGT - deceased estate - two-year extension
Question
Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time until the settlement date to the two- year main residence exemption on a dwelling to XXX 2021?
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 2022
The scheme commenced on:
1 July 2021
Relevant facts and circumstances
The deceased died on XXXX 20XX.
The deceased's spouse died on XXX 20XX.
The deceased and their spouse owned the property as joint tenants.
The property was purchased in XXXX 1996.XX
The property was the deceased's main residence for the whole of their ownership period.
The property was never used to produce income.
The property was less than 2 hectares in size.
Probate was granted in relation to the deceased on XX 20XX.
Probate was granted in relation to the deceased's spouse on XXX 20XX.
There were delays in probate being granted due to the legal ownership of a rental property owned by the deceased and their spouse. It was purchased as tenants in common which complicated the probate situation.
An historical caveat was also on the property and needed to be lifted, this all took a considerable amount of time.
In addition to the probate matters two of the executors were diagnosed with serious illnesses.
Initial conversation with a real estate agent took place in 20XX but due to the illness's nothing was done to put the property on the market.
Some refurbishments were also carried out on the property as it was in a poor state. This included:
• Complete repainting of the exterior and interior
• Replacing rotted woodwork
• Garden maintenance - including removal of trees and overgrown hedges and bushes
• Repairs to all fences
• Plumping repairs - mainly to old pipes
• Roof repairs
• Replacement of worn out carpets
• General cleaning
The property was sold via auction on in 20XX and settlement occurred in the 20XX financial year.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195