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Edited version of private advice
Authorisation Number: 1051972390103
Date of advice: 4 May 2022
Ruling
Subject: Capital gains tax
Question
Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 to extend the two-year period to dispose of the dwelling until the relevant date?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will extend the two-year period to dispose of the dwelling. 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 commences on:
1 July 20XX
Relevant facts and circumstances
The deceased died several years ago.
The property was purchased by the deceased several decades ago and was the deceased's main residence for the whole of their ownership period.
The property was less than 2 hectares.
Probate was granted in the year following the date of death.
The property was never used to produce income.
The deceased went into a nursing home a few years before death.
The property was vacant from when the deceased went into the home and when they died.
The reason for the delay in selling the property are as follows:
• You were caring for your spouse when your parent died, your spouse had significant health issues and was undergoing treatment and had a number of operations
• The demise of your parent and ill health of your spouse impacted your mental health and motivation
• The property needed significant maintenance
Your spouse was diagnosed with an illness and this required several years of treatment and operations along with many visits to health professionals.
Your spouse recovered from the illness after several years but requires frequent and ongoing medical appointments to check her status.
It was not feasible for you and your spouse to travel to the property to remove your parent's effects and prepare it for sale as your spouse needed to be near medical assistance and was too sick to travel.
It took you several years to contemplate what to do with the house and to sort through your parents possessions.
The property needed significant maintenance including collapsed ceilings and termite damage.
The property was put on the market.
A number of sales fell through in the following year.
The property finally sold and settlement occurred in the year after it was put up for sale.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195