Private ruling: Capital Gains Tax and the Commissioner's discretion to extend the two year period
Date of advice: 29 June 2017
Published: October 2017
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

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? | A1: Yes Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997, and allow an extension of time until the specified date. Further information on the relevant factors, and inheriting a dwelling generally, can be found on our website ato.gov.au by entering Quick Code QC17195 into the search bar at the top right of the page.

Relevant facts and circumstances: The deceased passed away on a specific date. The deceased purchased a property, which was their principal place of residence for all of the ownership period, except for a short period prior to the deceased’s death. During this time, the deceased was a resident of a nursing home. The property has never been used to produce assessable income during the entire ownership period and is less than two hectares in size. The property was vacant from the time the deceased moved into aged care until their death. The property was also vacant during the period between date of death and to settlement date. A and B were appointed as executors and equal beneficiaries of the estate. Probate was granted to A on a specific date with leave reserved to B. A engaged an estate agent for the property to be auctioned on a specific date. However the property was taken off the market, as B applied under leave reserved to take up their executorial position and did not consent to the sale. B obtained the grant on a specific date. From thereon, A had been unable to continue administering the estate in a timely manner as B suffered health conditions which lead to the lack of timeliness and poor decisions made. A letter from B’s doctor confirmed B had health issues prior to B taking up executorial duties. B passed away on a specific date. Unfortunately, B did not notify A of B’s personal circumstances or resign from the executorial duties during this period. Accordingly, various estate administrative matters which included the disposal of the property could not proceed without both A and B’s agreements. As the estate administration was not progressing, A sought to remove B from the executorial duties via legal proceedings in a particular year, on the basis that B refused to act or was unfit to act as required. The property was put up for sale once again. A contract for the property was signed on a specific date and settlement was completed at a later stage.

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