Private ruling: capital gains tax - deceased estate - two year discretion
Date of advice: 17 April 2020
Published: June 2020
Ruling period: Year ending 30 June 2020
Date scheme commenced: 1 July 2019

Ruling: Q1: Will the Commissioner exercise his discretion to extend the two year period under subsection 118-195 (1) of the Income Tax Assessment Act 1997 (ITAA 1997) to disregard any capital gains made on the sale of The Property? | 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'

Relevant facts and circumstances: The Deceased acquired a property at X in XXXX (The Property). The Property was their main residence until they died. Probate was granted several months later. The Deceased's friend commenced legal proceedings to challenge the terms of the will. The Property could not be disposed of until the legal proceedings were completed. Supreme Court Orders were handed down.These orders stated that the Property was to be disposed of and the proceeds distributed as per the terms of the order. The Deceased's children were previously estranged from them. Following the death of the Deceased, The Executor required them to clean the Property and prepare it for sale. This process added to the time taken to dispose of the Property. The Property was first placed on the market in XXXX. Settlement occurreda short time later. The sale price was $XXXX. The Property was sold a short time outside the two year period from when the deceased passed away. A capital gain resulted from the sale of the property.

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