Private ruling: Commissioner's discretion
Date of advice: 10 April 2026
Published: 22 June 2026
Ruling period: Year ended 30 June 20XX.
Date scheme commenced: 1 July 20XX.

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain or capital loss you made on the disposal? | A1: No


Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 118-130 | Income Tax Assessment Act 1997 section 118-195

Reasons for decision: Summary: Section 102-20 of the Income Tax Assessment Act 1997 (ITAA 1997) advises that capital gains tax (CGT) is incurred when a CGT event takes place and either a capital gain or a capital loss results. Any capital gain is added to any other assessable income for the relevant year and is then taxed at the appropriate marginal tax rate. A capital loss can be offset against other current year capital gains or carried forward indefinitely to be offset against future year capital gains. The most common CGT event is known as CGT event A1 and generally occurs whenever there is a change in ownership of a CGT asset from one party to another. | Detailed Reasoning - CGT and deceased estates: Section 128-20 of the ITAA 1997 explains that where a taxpayer dies, there are no CGT implications where an asset passes to the legal personal representative or beneficiary, but CGT may apply when the asset is subsequently disposed of. Assets forming part of the deceased estate are deemed to have been acquired by the representative or the beneficiary at the date of death of the deceased. You therefore acquired your ownership interest in the Dwelling on the date your Parent passed away. | Detailed Reasoning - Main residence exemption: Subsection 118-195(1) of the ITAA 1997 states that if you owned a dwelling in your capacity as trustee of a deceased estate (or if it passed to you as a beneficiary of an estate), then you are exempt from tax on any capital gain made on the disposal of the property if: • the property was acquired by the deceased before 20 September 1985; or • the property was acquired by the deceased on or after 20 September 1985 and the dwelling was the deceased's main residence just before the deceased's death and was not then being used for the purpose of producing assessable income and one of: • your ownership interest ends within 2 years of the deceased's death (the Commissioner has discretion to extend this period in certain circumstances); or • the dwelling was, from the deceased's death until your ownership interest ends, the main residence of one or more of: a) the spouse of the deceased immediately before the death; or b) an individual who had a right to occupy the dwelling under the deceased's will; or c) if the CGT event was brought about by the individual to whom the ownership interest passed as a beneficiary - that individual. In this situation, to be CGT exempt, you can sell the Dwelling up to two years after the Deceased's death, or longer, if the Commissioner allows. As a result, the normal capital gains tax rules will apply in relation to the transfer of the dwelling.

Relevant facts: The deceased passed away. | The deceased owned a dwelling. (The dwelling) | The dwelling was acquired by the deceased and their late spouse in 19XX. | The dwelling was not used to produce assessable income. | The land size is less than 2 hectares. | Under the deceased's Will the beneficiaries are each to receive an equal share in the estate. The beneficiaries are the deceased's children. | The Will named Child B and Child C as Executors (Executors) | The Will also provided that if any child of mine shall predecease me leaving a child or children him or her surviving then such child or children, upon the attaining of 30 years, shall take and if more than one in equal shares the share which his or her or their parent would have taken under this my Will had such parent survived me. | On XX XX 20XX a valuation was obtained for the dwelling. | Child A made an offer to acquire the interest of the other beneficiaries of the estate. | The transfer was completed and settlement took place on XX XX 20XX.