Private ruling: Deceased estate - two year discretion
Date of advice: 31 July 2019
Published: October 2019
Ruling period: Year ended 30 June 2019
Date scheme commenced: 1 July 2018

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 to the specified date in late 2018? | A1: Yes. The Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension to the two year time limit. However, the maximum area of land that is covered by the main residence exemption (including the area under the dwelling) must not exceed 2 hectares.

Relevant facts and circumstances: The deceased acquired a property (The Property). The Property is larger than 2 hectares. The Property was acquired for $XXX,XXX The Property was the main residence of the deceased throughout the ownership period. A substandard housing notice was issued. The deceased passed away overseas. The Property was not vacated before travelling overseas. The Property was not rented for any period prior to or after the death of the deceased. Probate was granted. The substandard housing notice was revoked at the request of the executors. The property was disposed of for $XXX,XXX. The deceased did not own real property overseas.

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