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Edited version of private advice
Authorisation Number: 1051892415787
Date of advice: 11 October 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?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time.
This ruling applies for the following period:
Year ended 30 June 2021
The scheme commences on:
1 July 2020
Relevant facts and circumstances
The deceased died several years ago.
The property was inherited by the deceased a few years prior to their death.
The property was the deceased's main residence for the whole of their ownership period.
Probate was granted in the same year that the deceased died.
The delay in selling the property was due to part of the property was resumed by the local council after the date of death. Due to significant delays in this process being finalised, the property was unable to sell the property until this process had been completed due to the potential significant effect it would have had on the potential sale price and interested parties.
Some relevant dates which provide an outline of the time period taken between when the Estate was notified that there was to be a part resumption of the property, to the date of completion and the approval of the Taking of Land Notice is as follows:
An email was provided to the Estate that the local councils were intending to resume a portion of the land attached to the property for road widening.
Confirmation by the local council that a Notice of Intention to Resume the land was to be issued
Email from the local council confirming that the Department of Resources had approved the acquisition of land, and that a Takin of Land Notice was to be published in the Government Gazette.
In addition to these key dates valuations were required to be obtained of the property to determine reasonable compensation for the land.
This all took time and given there was a pandemic delays occurred.
The property was never used to produce income.
The property was less than 2 hectares.
Settlement took place several months after the two years period had passed.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195