Private ruling: The Commissioner's discretion to extend the two year time limit to dispose of a dwelling
Date of advice: 6 December 2019
Published: February 2020
Ruling period: Year ended 30 June 2019.
Date scheme commenced: 1 July 2018.

Ruling: Q1: Will the Commissioner exercise 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 the relevant facts, the Commissioner will apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension to the two year time limit until the settlement date.

Relevant facts and circumstances: You act as the executor for the estate of the deceased. The deceased had lived in the dwelling. The dwelling was their main residence and has not been rented. The dwelling was sold and settled less than a month outside the 2 year limit. There were complications in obtaining probate that were exacerbated by the lawyer engaged at the time. The lawyer resigned due to his inability to deal with the issues surrounding the estate and a new lawyer had to be engaged causing delays. Once probate was granted steps were taken to dispose of the dwelling but due to the delay caused by issues with the lawyer and the downturn in the market the dwelling took longer than anticipated to sell. The dwelling was eventually sold but al lower price than was expected due to market conditions at the time.

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