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Edited version of private advice
Authorisation Number: 1051885078714
Date of advice: 13 August 2021
Ruling
Subject: Commissioner's discretion to extend the two-year time limit to dispose of an inherited house
Question
Will the Commissioner allow an extension of time to mid-20XX for you to dispose of your ownership interest in the house 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 66057' on ato.gov.au.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
At some time before 1985, the deceased and their spouse bought the house as joint tenants.
From 20XX to 20XX, the house was rented out.
In 20XX, the deceased's spouse passed away. The deceased inherited the remaining 50% ownership interest and became sole owner of the house. The house was deceased main residence until they moved into aged care. The deceased chose to continue to treat the house as their main residence while living in aged care.
In early 20XX, the deceased passed away.
In mid-20XX, you obtained probate.
In early 20XX, COVID-19 delayed your plans to sell the house in the first half of 20XX. Mainly due to landlord restrictions preventing you from evicting the tenant.
From late 20XX, the tenant was suffering from a life-threatening medical condition and was admitted to hospital several times. When the tenant was discharged from hospital you gave them notice of termination of the lease as you were selling the house.
In early 20XX, you listed the house for sale, and it sold quickly.
In mid-20XX, the house settled (just outside the two-year period).
Relevant legislative provisions
Income Tax Assessment Act 1997 Subdivision 115-A
Income Tax Assessment Act 1997 section 102-20
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 118-120
Income Tax Assessment Act 1997 section 118-130
Income Tax Assessment Act 1997 section 118-195