Private ruling: Two year exemption from capital gains tax for a deceased main residence
Date of advice: 26 March 2019
Published: May 2019
Ruling period: Year ending 30 June 2019

Ruling: Q1: Will the Commissioner exercise the discretion under 118-195(1) of the Income Tax Assessment Act 1997 and allow an extension of time to the two year period? | 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 52251’ on ato.gov.au

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. The deceased resided in their main residence until they passed. The property was never used for investment purposes. The will appointed one executor of the estate. One beneficiary was offered to purchase the property before selling it on the property market. That beneficiary was allowed to offset their entitlement to a share of the deceased’s estate as a credit towards payment of the deceased’s estate. Any costs associated with this are to be taken from the deceased’s estate. Once all the expenses are paid from the estate, any remaining cash and the proceeds from the selling of the property are to be divided equally among the beneficiaries. Allegations were made by one beneficiary, that another beneficiary took belongings and money from the estate they were not entitled to. This was denied and a few days later the accused beneficiary disputed the estate. The estate was placed on hold on until the dispute could be resolved. The mediation process took a number of months before it was resolved and the dwelling could be sold. The property was sold and settled shortly after, more than two years after the deceased’s death.

Relevant legislative provisions: Income Tax Assessment Act 1997 subdivision 115-A | Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 section 104-10