Private ruling: Deceased estate - two year discretion
Date of advice: 2 January 2020
Published: March 2020
Ruling period: Year ending 30 June 201X
Date scheme commenced: 1 July 201X

Ruling: Q1: Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain you made on the disposal? | 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: Your relative passed away and you were a beneficiary under the will. The property was your relative's main residence and was less than two hectares in size. Your accountant at the time failed to make you all aware of the capital gains tax implications of not selling the property within a two year period after your parent's passing. Your solicitor at the time was not very efficient in settling the will, completing the probate process and transferring the title into your three names. Many phone calls and meetings were made to finalise this process. You engaged a new legal firm to handle the sale of the property due to their slow performance. A family member had health issues around this time which added significant stress to the family and this was your main priority at the time. There was another relative who was occupying the house who had health issues. You didn't want to create family conflict and force them to move out of the house, which was against your deceased relative's wishes, and to put them under further stress with having to find another place to live. Probate took over three years to be granted. After the title had been transferred, you and your family spent many weekends cleaning and tidying the property for it to be in a reasonable state for sale. There was a large amount of rubbish removal and de-cluttering to be completed. A real estate agent was engaged one year after probate was granted and the property was sold some months later. The property was never rented out prior to its sale.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 118-195