Private ruling: Deceased estate and the capital gains tax (CGT) main residence exemption
Date of advice: 27 May 2019
Published: November 2019
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal? | A1: Yes. Having considered your 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 residential property (the property), in mid-20XX. The property was the Deceased's main residence when they passed away in early 20XX. The land on which the property is situated is less than two hectares in size. The Executors of the Deceased's Will obtained a grant of probate in late 20XX. A clause of the Deceased's Will permits their child to reside rent-free in the property for the period until they complete renovations on their own home. As such, after the Deceased passed away, the Executors were required to wait until the Deceased's child moved into the property, completed their own renovations and then moved out, before they could sell the property. The Deceased's child moved into the property in mid 20XX, where they lived for a number of years whilst renovations were carried out on their own home. When the Deceased's child moved out of the property, the Executors moved swiftly to put the property on the market for sale. The property was sold a couple of months after the property was listed for sale in late 20XX, with settlement taking place a few months later. The Executors did not use the property to produce assessable income. The property remained vacant from the Deceased's date of death until the Deceased's child moved into the property. It also remained vacant following the Deceased's child moving out of the property until it was sold. No renovations were completed on the property following the death of the Deceased.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 118-195