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Edited version of private advice
Authorisation Number: 1051911388674
Date of advice: 27 October 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 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.
In 20XX, the deceased's spouse passed away and the deceased became sole owner of the house. The house was the deceased main residence until they passed away in early 20XX.
A few months later, probate was granted. The will appointed the deceased's X children (the Trustees) as executors, trustees, and equal beneficiaries of the deceased's estate. The Trustees spent time grieving, locating a copy of the will, and arranging the transfer of the house to them.
In mid-20XX, the Trustees became the owners of the house. Shortly after, the Trustees met with a real estate agent to plan the sale of the house. The agent advised the Trustees to attempt to sell the house privately. Due to COVID-19 restrictions on real estate services and lockdowns, the house was not actively marketed to the public until early 20XX. The house was not made available to rent during this time.
In early 20XX, the Trustees appointed a real estate agent to sell the house at auction. Shortly after, the house sold settled less than one month after the two-year period expired.
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