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Edited version of private advice
Authorisation Number: 1052077945354
Date of advice: 16 January 2023
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two-year capital gains tax (CGT) exemption to dispose of the property?
Answer
Yes.
Having considered your circumstances and the relevant factors, the Commissioner will extend the two-year period to dispose of the dwelling. 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:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on 15 XXXX 20XX.
The property was purchased by the deceased first spouse in 19XX.
The property became the deceased main residence when she married her first spouse in 19XX.
The property was transferred to the deceased on 5 XXXXX 20XX as part of a separation agreement.
The deceased lived in the property up until their death.
The property was never used to derive income.
The property was less than 2 hectares.
Letters of Administration were granted to the deceased child on 11 XXX 20XX.
The deceased had a de facto spouse who had lived with her for a number of years prior to their death.
The de facto spouse contributed to the household expenses and maintained the property.
The de facto spouse assisted in the raising of the deceased children.
A deed of Family arrangement was entered into by the deceased's children and the spouse on 26 XXX 20XX.
The deed gave the de facto spouse a 1/3 share of the property.
Whilst there was no formal agreement in place, the beneficiaries did agree that the de facto spouse would be allowed to remain residing in the property until he was no longer able.
The de facto spouse lived in the property up until they went into retirement accommodation when the property was settled on 14 XXXX 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195