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Edited version of private advice
Authorisation Number: 1051946727901
Date of advice: 11 February 2022
Ruling
Subject: CGT - deceased estate
Question
Will the Commissioner exercise the 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 period for disposal of the property?
Answer
Yes. Having considered the circumstances and the relevant factors, the Commissioner is able to apply the discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time until the settlement date. Further information about the discretion can be found on our website ato.gov.au and entering QC 66057 into the search bar at the top right of the page.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on in 20XX.
The probate was granted on the following year to the executors of the Estate.
The property was purchased in 19XX.
The dwelling at the property was the deceased's main residence.
The size of the dwelling is less than 2ha.
The property was listed for sale.
The property was initially put up for auction. However, there were no serious offers received before the auction therefore no contracts were entered. As a matter of fact, there was no one turned up at the auction.
Following negotiations, in 20yy, the executors entered a Call Option Deed (the Deed) with the Purchaser.
The Call Option to purchase the property was the first serious offer.
The Purchaser proposed the "Call Option" to make appropriate enquiries and seek approvals prior to executing the purchase agreement. Once the Call Option Deed was signed the executors were prohibited from selling the property to anyone else.
The property was proceeded to sale when the Purchaser exercised the Call Option.
The settlement on the property was completed more than 2 years after the date of death.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-195(1)