Private ruling: Capital gains tax - deceased estate
Date of advice: 2 August 2017
Published: November 2017
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

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 period? | 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 DDMMYY. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC17195 into the search bar at the top right of the page.

Relevant facts and circumstances: The deceased passed away mid 20XX. The deceased owned a property. The property was never used to produce assessable income. A family provisions application was made against the estate by the deceased’s minor child. It was resolved and final orders made in mid 20XX. During this period no estate assets could be realised. There were various complex issues in relation to the property. The property was an owner builder project, built in 20XX. There was no Certificate of Occupancy (certificate) issued by the council prior to the deceased moving in to the residence. A relative of the deceased moved into the property as a caretaker around mid 20XX as arranged and agreed by the executor. The executor experienced difficulty in sourcing builders and draftsman to quote and complete required works to meet building regulations set by council. The Public Trustee & Guardian (Public Trustee) was appointed as the administrator of the estate on DDMMYY as the executor couldn’t continue their duty. From early–mid 20XX the Public Trustee had been negotiating with the relative to vacate the property and experienced difficulties in sourcing builders for required works. On DDMMYY investigation into selling the property without a certificate commenced and legal advice provided it could not be sold. Building works commenced in early-mid 20XX on the outside of the property. Extension of occupancy to the relative was granted on compassionate grounds however they did not leave the property until early-mid 20XX. The builder experienced delays in completing required works. The first application for the certificate lodged in mid 20XX was not approved due to unforeseen missing site plans. By mid-late 20XX all required works were completed and the certificate was received in late-mid 20XX. The property was sold with settlement occurring on DDMMYY.

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