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Edited version of private advice
Authorisation Number: 1052076736102
Date of advice: 17 January 2023
Ruling
Subject: CGT - deceased estate - 2 year discretion
Question
Will the Commissioner exercise the discretion under section 118-195 of Income Tax Assessment Act 1997 to allow an extension of time for you to dispose of your ownership interest in the dwelling acquired from a deceased and disregard the capital gain or capital loss you made on the disposal?
Answer
Yes.
Having considered your circumstances and the relevant factors the Commissioner will allow an extension of time. Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'.
This ruling applies for the following period:
The year ending 30 June 20YY
The scheme commences on:
1 July 20YY
Relevant facts and circumstances
The deceased passed away on DD MM YYYY.
The deceased acquired the dwelling on the property (the property) after 20 September 1985.
The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time.
The property was situated on less than 2 hectares of land.
The deceased passed away intestate.
Complexities of the deceased's estate delayed the estate administration, including the identification of beneficiaries and appointment of an administrator.
Letters of Administration were granted to the Administrator more than 2 years after the deceased's passing.
The property was left vacant after the deceased's death and was not used to produce income.
The property was cleared of the deceased's belongings soon after the appointment of the Administrator.
The property was in a state of disrepair. It was considered that the property would likely be sold as a knockdown proposition.
No work was undertaken beyond that necessary to prepare the property for sale, being to clear the deceased's items and to clean up the yard.
No refurbishment or renovation was undertaken with a view to improving the sale price.
An offer to purchase the property was received and accepted by the Administrator prior to the property clean-up being finalised and advertisement of the property commencing.
The property was sold by contract dated DD MM YYYY with settlement occurring on DD MM YYYY.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195