Private ruling: Capital Gains Tax and the Commissioner's discretion to extend the two year period
Date of advice: 7 September 2017
Published: January 2018
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Can you disregard any capital gain or loss that arises from the disposal of the property under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997)? | 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 the date of settlement. Further information on the relevant factors, and inheriting a dwelling generally, can be found on our website ato.gov.au by entering Quick Code QC17195 into the search bar at the top right of the page.

Relevant facts and circumstances: The deceased passed away on X January 20XX. The deceased owned a property (the property). The property was purchased by the deceased and their late spouse in 19XX. The property had always been the deceased’s principal place of residence and had never been used for income producing purposes. Under the terms of the Will the deceased’s child had the right of occupancy of the property for as long as the child wishes, provided that the child pays the rates and taxes, insurance premiums and maintains the property to the satisfaction of the Executors satisfaction. When, in the opinion of the Executor, the deceased’s child had ceased to live in the house permanently, the property would be bequeathed to the deceased’s children and step children that survive the deceased in equal shares. The deceased’s child ceased living at the property in 20XX. A contract for the sale of the property was signed in 20XX, with settlement to occur in 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 118-195(1).