Private ruling: Capital gains tax - deceased estate - extension of two year period - disposal
Published: October 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Would the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) in your particular circumstances? | A1: Yes.

Relevant facts and circumstances: Over two years ago your parent (parent A) passed away. Your parent A resided in the family home alone since your other parent's (parent B) death. The family home was disposed earlier this year over two years after your parent A's death. You have received proceeds from your parent A's estate. You are requesting for the Commissioner's discretion to extend the two-year period for the main residence exemption for the following reasons: · Due to your medical conditions as it hindered your ability to prepare parent A's home for disposal, and · the family home was not rented out during the period from your parent B's death and its disposal

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

Reasons for decision: Summary: Due to recent changed to section 118-195 of the ITTA 1997, the Commissioner now has discretion to extend the two-year period in the Act where: · the ownership of a dwelling or will is challenged · the complexity of a deceased estate delays the completion of administration of the estate · a trustee or beneficiary is unable to attend to the deceased estate due to unforseen or serious personal circumstances arising during the two-year period (for example, the taxpayer or a family member has a severe illness or injury), or · settlement of a contract for sale over the dwelling is unexpectedly delayed or falls through or circumstances outside the beneficiary or trustee's control. In your situation, parent A's home was not disposed of within two years from their date of death due to your medical conditions which delayed your ability to prepare the property for sale. Accordingly, you meet the criteria in which the Commissioner may exercise his discretion to extend the two-year period in which a deceased's main residence must be disposed of. The Commissioner's considers that it is appropriate to exercise his discretion on this occasion to extend the two-year period to the settlement date, being the date the property was disposed of.