Edited version of private advice

Authorisation Number: 1052080716727

Date of advice: 8 February 2023

Ruling

Subject: CGT - Commissioner's discretion

Question

Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain or loss you made on the disposal?

Answer

Yes

This ruling applies for the following period:

Income Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

On XX/XX/19XX, the Deceased and their spouse at the time, XXX purchased a residential dwelling at XXX as joint tenants ('the Property').

On XX/XX/20XX, the Deceased and XXX separated.

On XX/XX/20XX, the Family Court of XXX ratified Minute of Final Consent Orders under which the Property was to be subdivided and:

1.             Title to the front portion of the Property (which included the dwelling) to be transferred to the Deceased;

2.             Title to the rear portion of the Property to be transferred to XXX;

3.             The current mortgage over the entire property to be discharged and refinanced into the name of XXX solely; and

4.             Several items on the Property to be demolished, repaired or renovated

('the 20XX Orders').

On XX/XX/20XX, the Deceased passed away leaving a Will appointing XXX and XXX as the Executors ('the Executors') of the Estate ('the Estate').

On XX/XX/20XX, the Executors lodged a caveat over the Property on the basis that the 20XX Orders remained outstanding and XXX had re-located back into the dwelling (the Caveat).

On XX/XX/20XX, the Supreme Court of XXX granted Probate of the Will.

On XX/XX/20XX, the Executors sought legal advice and entered negotiations with XXX in regards to the Property. The Executors were seeking agreement with XXX to sell the property as is, or an undertaking from XXX to carry out the 20XX Orders.

On XX/XX/20XX, the Executors commenced proceedings in the Family Court of XXX seeking to vary the 20XX Orders and enforce the sale of the Property as is. Consequently, XXX advised the Executors that they had already commenced the subdivision process by filing an Application for Approval to subdivide.

On XX/XX/20XX, at a Directions Hearing in the Family Court, the Executors indicated they were willing to vary their application of X/XX/20XX and instead enforce the 20XX Orders. The Directions Hearing was adjourned.

On XX/XX/20XX at the adjourned Directions Hearing, the Executors and XXX agreed to Consent Orders which provided that the terms of the 20XX Orders were to be completed by XX/XX/20XX otherwise the Executors had the right to enforce the sale of the Property without subdivision.

On XX/XX/20XX, with subdivision of the Property well underway, the Executors afforded XXX further time to carry out the terms of the 20XX Order.

On XX/XX/20XX, the terms of the 20XX Order were satisfied and the subdivision was completing resulting in the Executors being registered as joint tenants on the title to the front portion of the Property which included the house ('the House'). This information was communicated to the Executors on XX/XX/20XX.

In XX/20XX, a child of the Deceased moved out of the House.

In XX/20XX, XXX moved out of the House.

In XX/20XX, a second child of the Deceased moved out of the House.

On XX/XX/20XX, the House was advertised for sale.

On XX/XX/20XX, the Executors entered a Contract for sale of the House conditional upon the Caveat being removed upon settlement.

On XX/XX/20XX, settlement of the Contract for sale of the House occurred.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195