Private ruling: Capital gains tax on a deceased estate.
Date of advice: 13 September 2018
Published: November 2018
Ruling period: Year ending 30 June 20XX.
Date scheme commenced: 1 September 20XX.

Ruling: Q1: Will the Commissioner allow an extension of time to 30 June 20XX for you to dispose of your ownership interest in the dwelling and disregard the capital gain or loss 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 inherited the property in November 19XX, after the death of the last living parent. The deceased used the property as their main residence for the entire ownership period. The property was never used for income producing purposes. The deceased passed away on in September 20XX. The deceased died intestate with two living relatives, his sibling and niece. The deceased’s sibling became the administrator of the estate. Between 20XX and 20XX the administrator experienced severe illness and injuries. The illness and injuries prevented the administrator from obtaining a drivers licence (or passport) and relied on carers for transportation. Due to the illness and injuries, the administrator struggled to acquire letters of administration. However they were granted in November 20XX. Upon the granting of letters of administration all efforts were made to efficiently dispose of the dwelling. However during this period, the administrator was hospitalised several times due to severe illness and injuries. The property was passed in at Auction in December 20XX. A contract of sale was signed for the property in December 20XX and settlement occurred in June 20XX. There was only one party pursuing negotiations post-auction, with initial alternative offers at seven or eight months for settlement, depending on price. There were several proposals and counter-proposals, with the final agreed sale contract reducing the settlement period to six months.

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