Private ruling: Two year exemption from capital gains tax for a deceased main residence.
Date of advice: 6 March 2019
Published: May 2019
Ruling period: 1 July 2017 to 30 June 2018

Ruling: Q1: Will the Commissioner exercise the discretion under 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: The deceased purchased property A as joint owners with their spouse; this was their main residence for their entire ownership period and was never used for investment purposes. The deceased’s last will stated that all the assets of the estate were to be left to their only child. An independent entity was appointed as the beneficiary’s administrator. The beneficiary resided at property A with the deceased and did so for some time after the passing of their parent until moving into supported residential services. Probate was initially granted to the beneficiary the following year. The beneficiary proceeded to transfer the property into their name. The independent entity working on behalf of the beneficiary, entered into a contract of sale to sell the property. Due to errors incurring on the ownership of the dwelling this matter was dealt with in court and settling with the independent entity being the executor of the estate. This delayed the sale process of property A which was sold out of the two year period.

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