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Edited version of private advice
Authorisation Number: 5010084615278
Date of advice: 17 June 2022
Ruling
Subject: Capital Gains Deceased Estates 2 Year
Question
Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two-year period until settlement?
Answer
Yes. The circumstances surrounding your son's passing and the subsequent investigations caused extreme distress and delays in preparing the property for sale.
This ruling applies for the following periods:
Year ended 30 June 20xx
Year ended 30 June 20xx
Year ended 30 June 20xx
The scheme commences on:
XX June 20xx
Relevant facts and circumstances
In Early 20xx, your son suffered a fatal workplace accident. Your son owned a property.
The property was his main residence at the time. In Mid-20xx probate was granted.
The property was subject to a mortgage which was discharged using proceeds from the workers compensation payout in early 20xx.
Days later, the property was transferred to you and your partner as equal owners. You and your partner live in a different state to the property.
Your son was in the process of renovating the property at the time that he passed away and the kitchen had been completely removed.
After consultation with real estate agents, it was determined that the kitchen renovation needed to be completed before placing the property on the market for sale
During the renovations, there were significant delays due to COVID-19, your distance from the property and other reasons outside your control.
In Mid-20xx, the unit was listed for sale.
Two months later, the unit was sold at auction and settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 118-195(1)