Private ruling: Deceased estate main residence exemption extension
Date of advice: 13 September 2017
Published: January 2018
Ruling period: Year ending 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 (ITAA1997) in relation to the property? | 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 late 20XX. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC52250 into the search bar at the top right of the page.

Relevant facts and circumstances: The property was acquired by the deceased and their spouse before 20 September 1985. The property was used as their main residence from the date of acquisition. In 20XX the deceased’s spouse died and left their portion of the property to the deceased. The deceased passed away in early 20XX. They left a will dated late 20XX. Probate was granted to the executors of the estate. The deceased’s child challenged the will. The dispute proceeded to the Supreme Court. The matter was heard in late 20XX. The issue was resolved at this time through orders of the court. Due to the dispute there was a delay in the administration of the estate, specifically the sale of the property. Following the orders from the court the property was transferred to the executors. After minor repairs, cleaning and painting, the executors appointed a Real Estate agent to sell the property at auction. The auction was unsuccessful. The executors appointed a different Real Estate agent and the property was sold in mid 20XX and settled in late 20XX. The property was not used to derive assessable income before or after the passing of the deceased.

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