Private ruling: CGT - deceased estate
Date of advice: 29 September 2021
Published: December 2021
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Date scheme commenced: DDMMYYYY

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 limit on the capital gains tax (CGT) exemption to dispose of an inherited dwelling from a deceased estate? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time until DDMMYYYY as disposal of the property was delayed by exceptional circumstances outside your control. Further information about this discretion can be found by searching 'QC 66057' on ato.gov.au

Relevant facts and circumstances: The deceased died on DDMMYYYY, leaving a will dated DDMMYYYY. Probate of the will was granted in the Supreme Court of the relevant Australian state or territory on DDMMYYYY to Child 1 and Child 2, substituted executors appointed under the will as the deceased's spouse, the instituted executor, predeceased the testator. The will provided that if the deceased's spouse did not survive them by one calendar month, then Child 1 and Child 2 were to be appointed as the trustees of the estate. At the time of death, the deceased was sole proprietor of the Australian property being folio identifier number X/XXXXXX (the property), which was inherited by the deceased's XXX children in equal shares as tenants in common. From the date of acquisition on DDMMYYYY until the date of death on DDMMYYYY, the deceased resided at the property as their main residence. Just before the deceased's death, the property was not then being used for the purpose of producing assessable income. The total property area less than X hectares. Clause XYZ of the deceased's will permitted any of their children who were already residing in the property at the date of their death, to continue to reside there subject to special conditions. The special conditions included the payment of rates, taxes, outgoings, and rental as the appointed trustees may in their absolute discretion direct. A child of the deceased also resided in the property as the main residence at the time of death of the deceased. The child met the conditions of clause XYZ of the will and continued to reside in the property until the child relinquished this right on DDMMYYYY, when the child re-located into an aged care home due to ill health. The four siblings were unable to dispose of the inherited property within two years of the deceased's death in YYYY, due to the right to reside given in the will. A contract for the sale of the inherited dwelling was signed on DDMMYYYY for $X and settlement occurred on DDMMYYYY.

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


This ruling applies for the following periods: