Edited version of private advice

Authorisation Number: 1051994571719

Date of advice: 23 June 2022

Ruling

Subject: CGT - deceased estates

Question

Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to for you to dispose of your ownership interest in the dwelling and the attached two hectares of land?

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' onato.gov.au

This ruling applies for the following periods:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

Person A owned a property (The Property). It consisted of a house (The Dwelling) and approximately XXX hectares of land.

Person A lived in the Dwelling as their main residence.

In approximately April 20XX, Person A moved in with their adult child (You).

The Dwelling remained vacant. Person A made the choice to continue to treat the Dwelling as their main residence.

Person A passed away (The Deceased).

You did not receive the death certificate for three months after the Deceased's death.

In March 20XX you lodged a notice of intended application for Probate with the relevant online registry.

In August 20XX probate was granted.

In January 20XX you started the process to have the Property transferred to you.

In March 20XX the Property was registered in your name as beneficiary of the Deceased's estate.

The Dwelling was run down. It required some work to render it habitable.

In addition to this, there was a significant amount of clearing of rubbish required and general cleaning. You had friends help on two occasions to fill four 6 x 6 metres skips, which still did not complete the job. Further skips were required later.

In late March 20XX You initiated the clean-up of the dwelling and the first of the necessary works.

In June 2021 a termite inspection revealed termite infestation/damage that would need to be rectified.

During this time, a family situation required your attention, and meant you had several trips overseas to address the matter.

On XX July 20XX suspected asbestos sheeting was removed from the Property.

While you were overseas on one of your trips, the Pest Control carried out the termite treatment at the Dwelling.

On XX July 20XX you returned from your final trip overseas back to City A, via City B. You commenced isolation at your home due to COVID cases at the airport. You also needed to regain your physical health and you sought counselling.

On XX August 20XX Pest Control carried out the final treatment for pest control.

Soon after, City A went into lockdown, after you had been out of your port-travel isolation for one day. This impacted your ability to finish clearing, cleaning and completing the required repairs to the Dwelling.

Approximately eight weeks later, lockdown ended. You immediately resumed the work at the Dwelling.

On XX November 20XX you emailed a real estate agent formally asking that they list the Property for you.

On XX December 20XX the Property was listed for sale at auction.

On XX December 20XX an online auction was conducted but the Property was passed in. It was immediately relisted for sale. Inspections were delayed due to Christmas and COVID exposures at the real estate agency.

On XX January 20XX an inspection was held, and offers were received.

On XX January 20XX You accepted an offer. Contract exchange was supposed to occur on XX January 20XX with settlement for XX February. This was delayed until XX February 20XX.

The purchasers moved into the Dwelling on exchange of contract in exchange for taking the Property as it was with no further clean-up of rubbish or cleaning to be completed.

Settlement was booked for the XX March 20XX.

On XX April 20XX the solicitor advised you that settlement had been delayed due to an issue with the purchaser's funds.

On XX April 20XX settlement occurred two years and four months after the Deceased death.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 118-195

Income Tax Assessment Act 1997 Part 3-1

Income Tax Assessment Act 1997 Part 3-3