Private ruling: Capital gains tax – deceased estates – Commissioner’s discretion to extend the two year period – main residence exemption.
Date of advice: 26 September 2018
Published: November 2018
Ruling period: Year ending 30 June 2018 | Year ending 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 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: You purchased a dwelling in State A before 20 September 1985. You married and your spouse’s name was added to the certificate of title. A number of years later you separated from your spouse. Your half share interest in the dwelling was transferred to your spouse. You were never legally divorced. Your spouse passed away (the deceased). You suffer from an illness. This results in manic episodes, examples given. Prior to, and following the deceased’s death, you were untreated for the disorder. After the deceased’s death, you experienced a manic episode followed by a period of depression. The title for the dwelling was transferred into your name. Your adult child lived with the deceased prior to the deceased’s passing, and continued to live in the dwelling rent free until the dwelling was sold. No work was undertaken to the dwelling following the deceased’s death. You have recently been stabilised with medication with the help and support of your family. A contract of sale was entered into and settlement occurred more than three years after the deceased’s death.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 118-130(3) | Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 subsection 118-195(1)