Private ruling: Commissioner’s discretion - section 118-195 of the ITAA 1997
Date of advice: 4 October 2018
Published: November 2018
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal? | 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 ato.gov.au

Relevant facts and circumstances: The Testator passed away. A Trustee was appointed through a grant of probate issued that just after the Testator’s death. The Property was purchased by the Testator prior to 20 September 1985. The Property is less than two hectares in size. A right to reside was established under the Will of the Testator that allowed for their child to reside in the Property as long as they were paying all of the outgoings of the Property and that they continued to reside in the Property and use it as their main residence. The Testator’s child resided in the Property until the year ended 30 June 2018 when they were incarcerated. As a result of the incarceration the child breached the conditions set out in the Testator’s Will, resulting in the Trustee using their discretion to terminate the life interest. The Trustee organised for the Property to be sold. During this time a caveat placed on the Property. The caveat prevented the sale of the Property. The caveat on the Property was lifted four months after being placed. On DDMMYY Trustee engaged the services of a realtor to sell the property. The Property was sold at the start of the year ending 30 June 2019, within three months of the caveat being lifted. The Property remained vacant from the time the Testator’s child left the Property until it was sold and settled and was never used to produce income.

Relevant legislative provisions: Section 118-195 of the Income Tax Assessment Act 1997