Private ruling: Capital gains tax – deceased estate – Commissioner’s discretion to extend the two year period to dispose of a dwelling
Date of advice: 25 February 2019
Published: May 2019
Ruling period: Year ended 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 to the two year period until settlement on the sale of the Property occurred? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on www.ato.gov.au .

Relevant facts and circumstances: The Deceased purchased the Property after 20 September 1985. The Deceased passed away after a number of years and the Property was their main residence just prior to the date they passed away. You were appointed as the trustees and executors of the Deceased’s estate (the Trustees). The Property was not used to produce income after the Deceased passed away. Person A sent a letter to you a number of months after the Deceased passed away advising that they had entered into an agreement with the Deceased and that they were making a claim for a specified amount against the Deceased’s estate as provided for in a document (the Document) made with the Deceased. A statement of claim was made by Person A in the courts in which they made a claim in relation to the Document against you and/or other parties. Probate on the Deceased’s estate was granted more than twelve months after the Deceased had passed away. A Deed of Settlement (the Deed) was entered into during the following year under which the following would occur: ● a specified amount would be paid to Person A within a specified timeframe; ● Person A would file a notice of discontinuance on the proceedings, and if required inform the court in person that the matter had been settled in accordance with the Deed; and ● all parties would discharge and release each other from all claims they have, or may have, or could have subject to the matter of the Deed, or any other relationship or debt obligation between any of the parties. The Property was put on the market after the Deed had been entered into, with the contract for the sale of the Property being entered into within a number of weeks, with settlement occurring a number of months later.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 102-20 | Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Subsection 118-130(3) | Income Tax Assessment Act 1997 Section 118-195