Private ruling: CGT - deceased estate and extension of time
Date of advice: 31 May 2022
Published: August 2022
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ending 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 2-year period until DD/MM/YYYY? | A1: Yes.

Relevant facts and circumstances: The deceased passed away in 20XX. The properties are 2 separate houses on 1 title deed that were to be transferred to you and the deceased's grandson in accordance with the will. As the houses are on one title deed, they needed to be subdivided before being transferred. The properties are not pre-CGT assets. The properties are not greater than 2 hectares. Legal issues delayed probate and it was obtained early-20XX. You contracted a Design company in mid-20XX to manage the development application required by council. Other assets were transferred to other beneficiaries by you in the following months. In late-20XX, you sustained an injury which resulted in extensive physiotherapy and significantly impacted your ability to perform the necessary requirements. In mid-20XX, you contacted your relative's solicitor to locate title deeds to enable the transfer of the properties. The solicitor found the Will was not correctly prepared and needed to obtain letters of administration. The properties were transferred to you in late 20XX while the sub-division applications were still pending. In mid-20XX the council provided the notice of determination for approval of the sub-division subject to necessary changes in the existing boundary between the properties. These changes required water and sewerage infrastructure changes that were not foreseen. In mid-20XX you contracted a surveying company to complete section 73 application and minor sewer works. In mid-20XX, the surveying company engaged a plumbing company to undertake the sewer works which were completed a month later. The section 73 was issued by City Water in mid-20XX. A structural problem with the garage on property 30A caused considerable delays and the necessary works were completed in early-20XX. Certification to verify the condition of existing stormwater infrastructure obtained in early-20XX after a 3 month wait. In early-20XX, the building inspector highlighted the requirement for additional modification to the garage which required an application that was completed a month later. In mid-20XX, the notice of determination was approved by the council. In mid-20XX, the construction certificate was obtained. Structural changes made to the garage in late-20XX. In early-20XX, the occupation certificate was obtained. Surveyor property plan of sub-division and deposited plan administration sheets submitted to council in early-20XX. After council asked for additional information, the appropriate certificate was completed and signed by the council in mid-20XX. The paperwork was delivered to your solicitor to be finalised with the land registry services. There were issues lodging the paperwork electronically and they had to be submitted physically to the land registry services late-20XX. In late-20XX, it was advised that the documents had been completed but sent to the surveyor for requisitions. The wrong plans were submitted which needed to be corrected. In late-20XX, the separate titles for the 2 properties were obtained from the land registry. In late-20XX, the original signed surveyor plans are submitted to the land registry services. The necessary paperwork regarding title deeds was signed in late-20XX. The title deeds were received by each beneficiary in late-20XX. The title deeds were transferred to the appropriate beneficiaries in late-20XX. The properties were prepared for sale starting late-20XX. After extensive maintenance was performed on the properties, they were listed on the market in 20XX. In 20XX, the properties were sold at auction.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 118-195(1)