Private ruling: Capital gains tax
Date of advice: 14 October 2017
Published: March 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: 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? | A1: Yes Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC52250 into the search bar at the top right of the page.

Relevant facts and circumstances: The property was a family home owned by Spouse A and Spouse B from 19XX. They divorced and the property was moved from joint tenancy to tenants in common. Following the death of Spouse B in late 19XX 50% of their 50% ownership interest was transferred to Spouse A and their remaining 25% ownership interest of the property was transferred to Child A. Child A suffered a medical condition from birth and continued to share the property with their parent, Spouse A, in an inter-dependent relationship. Child A passed away in early-mid 20XX and their Will left their 25% interest in the property to their relative, to be held on trust until they attained 30 years of age. Spouse A continued to live in the property as their main residence until they passed away in late 20XX. Spouse A’s Will provided for their 75% interest in the property to be transferred to their relative (being the same beneficiary as named in Child A’s Will), to be held on trust pending their attaining 30 years of age. Spouse A’s Will was challenged by Child B on the basis that no provision was made for them in the Will. Upon settlement of this claim, the executor was able to list the property for sale and it was sold by contract dated early 20XX with settlement in mid 20XX. Child A’s 25% interest was not sold within two years of their death.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-195


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