Private ruling: Capital gains tax
Date of advice: 8 September 2020
Published: October 2020
Ruling period: Income year ending 30 July 2021
Date scheme commenced: 1 July 2020

Ruling: Q1: Will the Commissioner exercise 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. For the reasons you have given, the Commissioner has exercised discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allowed an extension of time to the two year period until the settlement date.

Relevant facts and circumstances: The Deceased died. The Deceased left a will (the Will). Probate was granted. The Will included a dwelling the deceased owned (the Property). The Will delayed sale of the Property for several years from the date of death. The deceased's relative was living in the Property looking after the deceased until their death. Under the Will, the relative had the right to occupy the Property for a fixed number of years after the deceased's death. The relative moved out after the right to occupy had expired. There were delays in completing the construction of the relative's new home. Further delays were experienced due to Covid restrictions. The Will gave the executors the authority to extend the right to occupy. A contract for sale of the Property was entered into with settlement taking place. The property is less than 2 hectares. The dwelling was never used to produce income.

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