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Edited version of private advice
Authorisation Number: 1051931820562
Date of advice: 10 December 2021
Ruling
Subject: Extension of time to the two-year limit on the CGT tax exemption to dispose of an inherited dwelling from a deceased estate.
Question 1
Will the Commissioner exercise discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two-year limit on the capital gains tax (CGT) exemption to dispose of an inherited dwelling from a deceased estate?
Answer 1
Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time until DDMMYYYY, as the disposal of the property was delayed by exceptional circumstances outside your control. Further information about this discretion can be found by searching 'QC 66057' on ato.gov.au
This ruling applies for the following periods:
Year ended 30 June YYYY
Year ended 30 June YYYY
Year ended 30 June YYYY
Year ended 30 June YYYY
Year ended 30 June YYYY
Year ended 30 June YYYY
The scheme commences on:
DDMMYYYY
Relevant facts and circumstances
The deceased died on DDMMYYYY, leaving a Will dated DDMMYYYY.
Probate of the Will was granted in the Supreme Court of the relevant Australian state on DDMMYYYY to the Executor as described in the Will.
At the time of death, the deceased was sole proprietor of the property which was to be left in equal ownership shares to two beneficiaries, with the express wish that if possible the property be retained.
From the date of acquisition on DDMMYYYY until the date of death on DDMMYYYY, the deceased resided at the property as their main residence for CGT purposes.
Just before the deceased's death, the property was not then being used for the purpose of producing assessable income. Since the deceased's death, the property has been left vacant.
The total property area is X square metres, which is than 2 hectares.
The Will was contested by beneficiary one on DDMMYYYY.
The Executor was unable to dispose of the inherited property within two years of the deceased's death in YYYY, due to the inheritance family provision claim, which was finalised when the court order was issued on DDMMYYYY.
COVID-19 border closures were in place between the relevant Australian states during YYYY and YYYY.
Beneficiaries and their legal representation were indecisive on the estate administration, delaying the handover and sale of furniture and effects. The Executor advised us attempted contact was made with the beneficiaries in late YYYY and early YYYY. Contact was finally made and completed by DDMMYYYY.
A contract for the sale of the inherited dwelling was signed on DDMMYYYY for $X and settlement of the property occurred on DDMMYYYY.
As of DDMMYYYY, the estate had not yet been fully administered.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-195(1)