Private ruling: Income Tax - Deceased estate - 2 year discretion
Date of advice: 21 May 2019
Published: July 2019
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner allow an extension of time to February 20XX (i.e. to approximately 5 years) for the beneficiaries to dispose of their ownership interest in the dwelling and disregard the capital gain they make on the disposal of the dwelling and two hectares only of adjacent land? | A1: Yes. Having considered the 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 acquired a dwelling The deceased passed away in 20XX The dwelling was the deceased’s main residence. The property size is more than two hectares. The dwelling was not used to produce assessable income. The Will was contested before being fully administered late in the year after the deceased’s death. An appraisal made in the year after the deceased’s death listed the dwelling as old and inhabitable and property zoned as “conservation’ and ‘partly community purpose’. The dwelling was subject to several sale contracts two, three and four years after the deceased’s death. However, these were repeatedly terminated due to diligence condition clauses in the contracts which were subject for development applications that were repeatedly denied by Council. A further contract for sale was signed approximately 5 years after the deceased’s death. Settlement occurred two weeks later.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 118-130(3) | Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 subsection 118-195(1)