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Edited version of private advice
Authorisation Number: 1051996454160
Date of advice: 23 June 2022
Ruling
Subject: CGT - inherited property
Question
Will the Commissioner of Taxation allow for an extension of the two-year rule under section 118-195 of the Income Tax Assessment Act 1997 on the sale of the property?
Answer
Yes. Having considered the circumstances and relevant factors you have provided; the Commissioner will exercise his discretion and allow an extension of the 2-year limit for an exemption from CGT on the disposal of an inherited property. CGT is disregarded from the deceased's date of death until the disposal of your ownership interest in the property. Further information about this discretion can be found by searching 'QC 66055' on ato.gov.au.
This ruling applies for the following period:
Period ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased, Person A, inherited the property at XXXX from their parent, who passed away on XX XX 20XX. The title was transferred to the deceased on XX XX 20XX.
The property as the main residence of the deceased since it was acquired.
The property was never used to produce income nor were any capital improvements made.
The deceased did not own any other properties during the ownership period.
The deceased passed away on XX XX 20XX.
The deceased left no will at date of death.
A cousin of the deceased approached XXX lawyers to assist in administering the estate.
On XX XX 20XX the estate was referred to the trustee by the lawyers as there was no will.
There was no immediate family and the trustee had to locate other relatives.
On XX XX 20XX letters of administration were granted to the trustee.
Obtaining the property's certificate of title from the solicitors was delayed due to COVID. The certificate of title was received on XX XX 20XX.
When the certificate of title was received, it was discovered that there was an issue with the certificate of title that needed to be attended to before the property could be placed on the market. The issue was resolved on XX XX 20XX.
Due to COVID lockdowns and restrictions, there were delays in getting the property cleaned, booking inspections, obtaining documents, and resolving the issue with the title.
You engaged the agent to sell the property on XX XX 20XX and the Auction authority was signed on XX XX 20XX. The auction date was set for the XX XX 20XX.
The contract date for the sale was XX XX 20XX with settlement occurring on XX XX 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-200