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Edited version of private advice
Authorisation Number: 1052081969804
Date of advice: 27 January 2023
Ruling
Subject: CGT main residence - deceased estate
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 dwelling to XX XXX 20XX?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will extend the two-year period to dispose of the dwelling to XX XXX 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 ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on XX XXX 20XX.
The deceased purchased the property on XX XXX 19XX.
The property was the deceased's main residence for the whole of their ownership period.
The property was never used to produce assessable income.
The property was less than 2 hectares.
Probate was granted on XX XXX 20XX.
The beneficiary's child who was the grandchild of the deceased returned from interstate due to Covid and the lock-downs where they had been studying.
The grandchild moved into the deceased's property in 20XX for approximately XX months leaving to return to interstate to commence studies.
The deceased's grandchild was a XX year old living in Student accommodation and was in their first year of university studies when Covid restrictions were introduced.
Due to the extensive lockdowns in Victoria, they suffered financial stress after becoming unemployed.
They also suffered anxiety and depression due to the lockdowns and found living in the confined space of student accommodation to be overwhelming.
When they could leave interstate, they were able to return to their home state to be closer to family to assist them with the mental health issues.
It was initially thought that the return would be for a short time while and that they would then return to resume their studies. The ongoing covid restrictions in 20XX however caused ongoing difficulties and they remained in their home state during 20XX.
The property was kept available for them to have somewhere to live in the short term. It was not anticipated at the time that their stay would extend as long as it did.
The contract for the sale of the property settled in 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195