Private ruling: Capital gains tax - deceased estate
Date of advice: 14 June 2018
Published: August 2018
Ruling period: Year ended 30 June 20xx
Date scheme commenced: 1 July 20xx

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 is able to apply his discretion under subsection 118-195(1) of the ITAA 1997, and allow an extension of time until August 20XX. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC52250 into the search bar at the top right of the page.

Relevant facts and circumstances: The deceased passed away in June 20XX. The property was the deceased main residence until 20XX, when he moved into rental premises in a different state. The property was income producing from 20XX until his date of death, a period of less than six years. The deceased did not purchase another residence prior to the date of his death and the property continued to be regarded as his main residence until his date of death. It was vacated after the date of death in order to get the property in a condition to sell, and was not income producing after the date of death. The deceased’s Will appointed his (now Divorced) wife as executor and beneficiary. As the deceased and his wife divorced following the making of the Will and prior to his death, the appointment of her as executor and any disposition to her as beneficiary was rendered void by operation of certain provisions of the Succession Act 1981. The result was that the deceased’s children became the sole beneficiaries of the estate. Soon after the deceased died, the deceased’s de-facto spouse, at the date of death, commenced Court Proceedings claiming provision from the estate pursuant to the provisions of Part IV of the Succession Act 1981 . Court Proceedings were settled and discontinued in early 20XX. Administration of the estate was stayed during the Court proceedings and it was only after that time that the executor could proceed with administration of the estate, including sale of the house. The house was listed for sale following resolution of the Court Proceedings, but due to the state of the property market and the condition of the property itself, settlement did not occur until mid-20XX.