Private ruling: CGT - deceased estate
Date of advice: 7 May 2021
Published: July 2021
Ruling period: Year ending 30 June 20YY.
Date scheme commenced: DD/MM/YYYY

Ruling: Q1: Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard any capital gain or loss you made on the disposal? | A1: Yes. Having considered the circumstances and the relevant factors the Commissioner will allow an extension of time under subsection 118-195(1) of the Income Tax Assessment Act 1997 . Further information about this discretion can be found by searching QC 52250 on ato.gov.au.

Relevant facts and circumstances: The deceased passed away on DD/MM/YYYY. The deceased acquired the vacant block before 20 September 1985 (the block). A dwelling was constructed on the block before 20 September 1985 (the dwelling). Before 20 September 1985, an extension to the dwelling including two bedrooms, a lounge area and a built-in area underneath the dwelling was added. After 20 September 1985 a second extension to the dwelling occurred. A top storey including two bedrooms, one kitchen, one bathroom and one sewing room was added to the dwelling. The dwelling was the main residence of the deceased during the ownership period. The deceased did not use the dwelling to derive assessable income. Probate for the estate was granted on DD/MM/YYYY. The executor of the deceased's estate resided in Town A. The deceased was a hoarder. The executor began removing the deceased's possessions from the dwelling on DD/MM/YYYY. The executor was required to remove a significant amount of the deceased's possessions from the dwelling to prepare it for sale. The executor attended to this every weekend. The dwelling contained 6 bedrooms that were all filled with the deceased's possessions. It took the executor approximately two years to remove the deceased's possessions from the property. In MM/YYYY, termites were discovered in the flooring of the bathroom and lounge area on the middle level of the dwelling. Floorboards and carpet affected by termite damage were removed to make the flooring safe. Only the floorboards were replaced, no new carpet was laid in the affected areas. On DD/MM/YYYY, the dwelling was inspected for termites and no further traces of termites were detected. On DD/MM/YYYY, the hot water system on the dwelling began leaking and required replacement prior to the property being listed for sale. From MM/YYYY to DD/MM/YYYY, the executor was subject to COVID-19 restrictions and lockdowns, restricting their ability to prepare the dwelling for sale. On DD/MM/YYYY builders repaired further termite damage discovered on the veranda. This was required to make the dwelling safe to inspect by potential buyers. On DD/MM/YYYY, the real estate were contacted by the executor with the intention of listing the dwelling for sale. The real estate advised the executor to recarpet termite- affected areas of the dwelling and remove more of the deceased's belongings from the property prior to it being listed for sale. On DD/MM/YYYY, the executor purchased the required carpet for the dwelling. On DD/MM/YYYY the State Government placed Town A in lockdown due to COVID-19. On DD/MM/YYYY the State Government lifted lockdown restrictions in Town A. The real estate was re-engaged to sell the dwelling on this date. On DD/MM/YYYY new carpet was laid in the termite- affected areas of the dwelling. From MM/YYYY to MM/YYYY, the executor cleared more of the deceased's possessions from the dwelling. On DD/MM/YYYY, a contract for sale was signed for the property. On DD/MM/YYYY settlement occurred.

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