Private ruling: Capital gains tax and deceased estate
Date of advice: 4 June 2018
Published: August 2018
Ruling period: Year ending 30 June 2018
Date scheme commenced: 1 July 2017

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 until settlement date? | 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 until settlement date. Further information on the relevant factors and inherited dwellings generally can be found on our website ato.gov.au and entering Quick Code QC52246 into the search bar at the top right of the page.

Relevant facts and circumstances: The deceased owned property jointly for five years and this dwelling was the deceased’s main residence. The deceased became the sole owner of this dwelling from 20XX up until their date of death (DOD), and this dwelling had remained their main residence. This dwelling was not used for income producing purposes at any time. The deceased’s DOD was in 20XX. Probate was granted to a relative in 20XX who was the sole executor and trustee of the estate. The estate was challenged by a relative of the deceased and this led to a lengthy legal proceeding. One of the conditions while the will was being contested prevented the trustee from removing anything from the property; having anyone stay at the property, do any repairs and/or sell the property. This dispute was resolved in 20XX and once resolved the property underwent repairs to prepare the property for market. During the time of preparing the property for market, the trustee was unable to attend to the deceased’s estate due to unforeseen circumstances arising to a family member’s illness. The property was placed on the market and settlement occurred in 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10, | Income Tax Assessment Act 1997 section 152-80 and | Income Tax Assessment Act 1997 subsection 152-100.