Edited version of private advice

Authorisation Number: 1052026000628

Date of advice: 29 September 2022

Ruling

Subject: CGT - deceased estate

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 the two-year period until settlement?

Answer

Yes, having considered your circumstances and relevant factors, the Commissioner will allow an extension of time.

This ruling applies for the following periods:

Year ended 30 June 20xx

Year ended 30 June 20xx

Year ended 30 June 20xx

Year ended 30 June 20xx

The scheme commences on:

26 February 20xx

Relevant facts and circumstances

You advised that:

The deceased passed away on xx November 20xx

The deceased acquired the property on xx March 20xx

The property was the deceased's principal place of residence until they passed away.

The land area on which the dwelling is located is XXX meters.

The property has never been used by the deceased to produce assessable income nor, has the property been used to produce assessable income after the deceased's death.

You are the only child of the deceased.

Probate was granted on x February 20xx

The title of the property was transferred to the beneficiary on xx March 20xx.

The estates final tax return was issued xx December 20xx

You advised that the deceased has a significantly large quantity of possessions at the property advising that the X-car garage space was packed full as well as the rest of the house.

At the start of 20xx, you advise you had sorted through approximately two-thirds of the deceased possessions.

Detailed timeline of events from date of probate until the property was sold in 20XX:

•                    xx December 20xx - x January 20xx - Executor/Beneficiary (as next of kin) attended property to maintain property and sort and process Deceased's possessions

•                    xx - xx February 20xx - Executor/Beneficiary (as next of kin) attended property to maintain property and sort and process Deceased's possessions.

•                    xx February 20xx - Probate granted.

•                    xx - xx April 20xx - Executor/Beneficiary attended property to maintain property and sort and process Deceased's possessions

•                    April 20xx - Discovered ant infestations in house ceiling and walls and in property boundary wall.

•                    June 20xx - Discovered leak into loungeroom ceiling.

•                    xx - xx July 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    xx - xx September 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    xx October - x November 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    November 20xx - Leak discovered from kitchen ceiling at edge of skylight.

•                    November 20xx - Skylight replaced in kitchen.

•                    xx - xx December 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    xx -xx February 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    February 20xx - Onset of COVID-19 in Australia; lockdowns, border, and travel restrictions.

•                    xx March 20xx - Title of property transferred to Beneficiary.

•                    xx March - xx May 20xx - Victoria lockdown.

•                    xx - xx April 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    xx - xx June 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    x July - xx October 20xx - Melbourne lockdown

•                    November 20xx - Beneficiary relocated for work from Canberra ACT to Adelaide SA.

•                    xx November 20xx - real estate agent engaged.

•                    xx November - x December 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    xx - xx December - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    December 20xx - Leak discovered in kitchen ceiling next to skylight.

•                    December 20xx - March 20xx - Plaster damage from leaks were repaired and property was painted.

•                    x - x January 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    x February 20xx - Majority of deceased's possessions removed from property

•                    February 20xx - Pool pumped failed.

•                    February 20xx - Worn carpet replaced.

•                    xx - xx February 20xx - South Australia border closed to people who have been in Greater Melbourne.

•                    xx - xx February 20xx - Victoria lockdown.

•                    xx - xx February 20xx - Garage sale planned to dispose of deceased's possessions but cancelled due to lockdown and interstate border/travel restrictions.

•                    March 20xx - Pool pump replaced.

•                    March 20xx - Damaged hardwood floor repaired and refinished.

•                    xx - xx March 20xx - Executor/Beneficiary attended property to maintain property and sort and process deceased's possessions.

•                    xx -xx March 20xx - Garage sale held to dispose of deceased's possessions.

•                    April 20xx - Property cleaned, garden tidied.

•                    xx April 20xx - Last of deceased's possessions removed from the property (garage).

•                    April 20xx - Garage painted.

•                    April 20xx - Dampness discovered in garage walls.

•                    May 20xx - Garage walls treated and repainted.

•                    May 20xx - Increased dampness and water seepage from garage walls; arrangements sought for leak testing (delayed property listing).

•                    xx May - xx November 20xx - South Australia border closed to people who have been in Greater Melbourne/Victoria.

•                    xx May - xx June 20xx - Victoria lockdown (delayed property listing).

•                    xx June 20xx - Property listed for sale.

•                    xx June 20xx - Pool leak testing conducted; leak located.

•                    x July 20xx - Property sold at auction; sale contract executed.

•                    xx - xx July 20xx - Victoria lockdown.

•                    x August - xx October 20xx - Victoria lockdown.

•                    x September 20xx - Settlement of the property sale.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 104-10,

Income Tax Assessment Act 1997 section 118-195, and

Income Tax Assessment Act 1997 subsection 118-195(1)