Private ruling: Capital gains tax - deceased estate - two year discretion
Date of advice: 27 May 2020
Published: July 2020
Ruling period: Year ending 30 June 2020
Date scheme commenced: 1 July 2019

Ruling: Q1: Will the Commissioner allow an extension of time to the date of settlement for you to dispose of your ownership interest in the dwelling and disregard the capital gain 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 property was acquired by the deceased in 20xx. The property was the deceased's main residence from the time the property was purchased, until the date of death in 20xx. Probate was granted in 20xx. The Will appointed person A as the executrix of the Will and trustee of the estate. The Will nominated the estate beneficiaries as person A and person B, as tenants-in-common in equal shares. After the date of death, person B continued to reside in the property. At the end of 20xx, both beneficiaries discussed the future of the property, and it appeared likely they would both agree to sell the property. From this point, the following events occurred, delaying the sale of the property: In 20xx, person A advised the estate's administrator that there was a possibility that person B would contest the Will. The estate's administrator advised that the parties did consider the CGT 2 year main residence exemption at this time, but appeared to be operating under advice received from another accountant that if a close relative lives in the property then this will extend the main residence exemption. In 20xx, person B's solicitor rejected a proposal put forward by the estate's administrator, which stated person A wanted to sell their share of the property to person B. Person B's solicitor then registered a caveat on the property, preventing person A to sell the property without their consent. During the period between 20xx and 20xx, there were continuing negotiations between the beneficiaries, with both parties finally reaching an agreement in 20xx to sell the property. The property sale contract was signed in 20xx, with settlement of the property taking place in 20xx. Relevant legislation Income Tax Assessment Act 1997 section 118-195