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Edited version of private advice
Authorisation Number: 1052020016608
Date of advice: 25 August 2022
Ruling
Subject: Capital gains tax
Question
Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two-year period to dispose of the percentage of the dwelling owned by the deceased to the date of settlement?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will extend the two-year period to dispose of the dwelling to 20XX. 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:
01 July 20XX
Relevant facts and circumstances
The deceased died several years ago.
The deceased owned a percentage interest in the residential property at the time of their death. Their child owned the other remaining percentage.
There were a number of residential dwellings erected at the abovementioned property. The deceased resided in the one of the dwellings as their principal place of residence until death and their child resided in another dwelling as their main residence until the property was sold.
The child had a right to occupy the dwelling under the deceased's will.
The land size was one Hectare.
The property was not used for farming, primary production or commercial purposes.
At all relevant times, it was the main residence of the deceased.
Probate was granted to the Executor in a later year.
There was a number of court hearings in relation to the estate which contributed to the delay in the sale of the property.
The reasons for the delay in the sale of the property is as follows:
Summons filed in the Supreme Court seeking family provision orders
Probate granted to the Executor
Summons filed in the Supreme Court, sibling of the deceased seeking family provision orders
The co-owner of the property as to percentage owned is joined as Second Defendant to the Supreme Court proceedings by Amended Summons
The second proceedings are settled by consent
The earlier proceedings are settled by consent
The earlier proceedings are settled by consent and final orders made by a Justice of the Supreme Court
The selling agent provides the agency agreement which is accepted by the Executor and the co-owner
Contracts for sale and purchase of land are prepared on the instructions of the vendors
Marketing of the property is commenced
The deceased's share of the property is transmitted to the Executor
A contract for sale was entered into several year after the date of death and settlement was completed in the following calendar year.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195