Private ruling: Capital gains tax - deceased estate two year discretion
Date of advice: 24 July 2019
Published: October 2019
Ruling period: Year ended 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 deceased passed away. The deceased resided in the property until being moved to an aged care facility. The property was the deceased's main residence and the deceased continued to treat the property as such up until date of death. The property was not used to produce income before or after the deceased's passing. The deceased had three wills prior to death. The beneficiaries named in the second will disputed the validity of the third will on the supposition that the deceased was legally incapacitated at the time of its making. A caveat was lodged by the beneficiaries named in the second will to prevent a grant of probate being issued on the third will. Another caveat was lodged by the remaining beneficiaries named in the third will to prevent a grant of probate being issued on the second will. The dispute was resolved after four years and required involvement of solicitors. It was agreed that an application for a grant of probate should be made on the first will. The public trustees withheld the keys to the property until the dispute was finalised. Probate was granted. The property was listed for sale and contract signed. Settlement occurred.

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