Edited version of private advice

Authorisation Number: 1051891294959

Date of advice: 17 September 2021

Ruling

Subject: Capital gains tax

Question

Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time to the two-year main residence exemption on a dwelling to 10 September 20XX?

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 ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

The deceased passed away over two years ago.

You and your sibling were executors to the estate.

The deceased was your parent.

The property was the deceased's main residence for the whole of the ownership period.

The property was purchased several decades ago.

Probate was granted a few months after the deceased passed away.

The property was never used to produce income.

The property was less than X hectares in size.

The property has been vacant since the deceased passed away.

The reason why the property was not sold within the 2 year time period was due to your sibling suffering mentally over your parents death and additional mental stress during the Covid pandemic.

Your sibling also lost their income due to the pandemic and this exacerbated their mental health.

The property also needed to be prepared for sale and due to the ill health of your sibling this was not done within the 2 years.

Settlement for the property was a couple of months after the two year exemption had passed.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195