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Edited version of private advice
Authorisation Number: 1052181768138
Date of advice: 27 October 2023
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise his discretion under subsection 118-200(3) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two-year period to dispose of the property?
Answer
Yes. Having considered your circumstances and the relevant factors the Commissioner will allow an extension of time.
However, this will not result in a full exemption because the property was not the deceased's main residence at the time of death. (This would be so even if the administrator made an absence choice on behalf of the deceased because the property was rented for more than 6 years before the deceased passed away.)
Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'. Further information about calculating a partial exemption for an inherited property can be found by searching ato.gov.au for 'QC 66055'.
This ruling applies for the following period:
Year ending 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased acquired their ownership interest in the property in April 20XX.
The property was less than 2 hectares.
The deceased died in December 20XX.
The deceased's daughter is the administrator and trustee of the deceased's estate.
The beneficiaries of the property are the deceased's daughter and son.
The deceased was not living at the property at the time of death.
The property was used to produce assessable income (rented out) from approximately April 20XX.
Settlement of the sale of the property occurred in January 20XX.
The 2-year CGT exemption limit was exceeded due to legal proceedings abroad relating to the Will.
Relevant legislative provisions
Income Tax Assessment Act (ITAA) 1997 subsection 118-200(3)