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Edited version of private advice
Authorisation Number: 1052296165496
Date of advice: 27 August 2024
Ruling
Subject: Pre CGT - deceased estates - 2 year discretion
Question 1
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 50% ownership in the dwelling and disregards the capital gain or capital loss you made on the disposal?
Answer 2
Yes. Having considered your circumstances and the relevant factors the Commissioner will allow an extension of time. 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 ended 30 June 20XX
The scheme commenced on:
XX 20XX
Relevant facts and circumstances
The deceased and X, the deceased's brother, acquired 100% interest in the property as tenants in common (50% share each) before 20 September 1985.
The deceased passed away on XX 20XX.
The property was situated on less than two hectares of land.
In the deceased's Will, the deceased left to you their 50% share in the property, subject to a life interest of the deceased's spouse, Y.
X passed away on XX 20XX.
X also left to you 50% of his interest in the property.
The executor of the deceased did not transfer the property to you because the deceased Will granted a life interest to Y.
The property was rented out by X and Y intermittently.
Y experienced health issues in 2023 and Y required full time care by the family.
On XX 20XX, Y's life interest was relinquished and the deceased's 50% interest in the property was transferred to you. X's 50% interest in the property was transferred to you on the same day.
Y passed away on XX 20XX.
You took steps to prepare for the sale of the property and the property was sold on an auction on XX 20XX.
The rental agreement was terminated on XX 20XX.
The settlement date of sale occurred on XX 20XX.
Relevant legislative provisions
Income Tax Assessment Act subsection 118-195 (1)