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Edited version of private advice
Authorisation Number: 1052193748739
Date of advice: 16 November 2023
Ruling
Subject: CGT - main residence exemption
Question 1
Do you qualify for the CGT main residence exemption on the sale of an inherited property?
Answer
Yes.
Question 2
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 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. In addition, we consider that you qualify for the Main residence exemption on the sale of the property. 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:
Year ending 30 June 2024
The scheme commenced on:
7 August 2023
Relevant facts and circumstances
Your parent (the deceased) passed away on XX July 20XX
The dwelling is located at Property A (the property).
The deceased acquired the property before XX September 19XX. **(approximately XX years ago - 19XX)
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 two hectares of land.
The main residence of your parent was bequeathed to you in their Last will and Testament.
Your parent bequeathed to you, in their Last Will and Testament, their main residence at Property A.
Your parent's spouse was given the right to occupy the property until such time as they decided to leave or upon their death. This was stipulated in your parents Last Will and Testament.
Your parent's spouse continued to occupy the property until they passed away on XX February 20XX.
The property was held by the executors and trustees of the estate until the property was later transferred to you. This confirmed with the Water and rates noticed supplied
The property was transferred to you on the XX July 20XX. You have the supplied the land title to confirm this.
The property was listed for sale as soon as practicable after the right to occupy stipulation was no longer an impediment.
You listed the property for sale on XX August 20XX.
You sold the property on XX September 20XX and have supplied the contract of sale.
The sale of the property is due to be completed within 12 months of the property being listed for sale.
The property settlement occurred XX October 20XX.
Relevant legislative provisions
Income Tax assessment Act 1997 section 118-195