Private ruling: Capital gains tax - deceased estate - Commissioner's discretion to extend the two year period - main residence exemption
Date of advice: 11 September 2019
Published: October 2019
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner allow an extension of time to March 20XX 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 passed away in 20XX. The deceased acquired a property with their spouse prior to 20 September 1985 and elected it as the principle place of residence before moving into an aged care facility. The deceased obtained full ownership of the property in 20XX. The deceased had a Will. The estate was left to the deceased's children, in equal shares. Probate was granted in 20XX. After the estate was finalised, Beneficiary 1 purchased Beneficiary 2's share due to financial difficulties and Beneficiary 3 purchased Beneficiary 4's share due to medical issues. Beneficiary 4 passed away soon after. The property was sold in early 20XX to an unrelated third party. Settlement occurred in early-mid 20XX. The property did not produce any income from the date of death until the date of sale. It was mostly vacant but at times it was used as a family holiday home. The sale of the property was delayed because of the untimely deaths (of the deceased and Beneficiary 4) and subsequent legal ramifications. This prevented the dwelling being sold within two years from the deceased's death. The property was sold a short time outside the two year period.

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