Private ruling: Capital gains tax - deceased estate - Commissioner's discretion
Published: August 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Could the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) in your particular circumstance? | A1: Yes

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Over two years ago your parent (parent A) died suddenly and unexpectedly. Your parent A resided in the family home alone since your other parent's (parent B) death. The family home was disposed earlier this year over two years after your parent A's death. You have received proceeds from your parent A's estate. You are requesting for the Commissioner's discretion to extend the two-year period for the main residence exemption for the following reasons: · more than 10 years ago you were diagnosed with a number of medical conditions · you have been under the care of a specialist doctor since being diagnosed with these conditions · whilst these conditions have been managed with medication, both medical conditions were exacerbated by the sudden death of your parent A · you have several children to care for · you are in part-time employment · you resided more than an hours drive from your parent A's home · your sibling who resides more than three hours away from your parent A's home developed a medical condition · your sibling spent a significant amount of time at your home after the death of your parent A where you cared for and supported them · because of you and your sibling's medical conditions it hindered your ability to prepare your parent A's home for disposal, and · the family home was not rented out during the period from your parent A's death and its disposal

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

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. Due to recent changed to section 118-195 of the ITTA 1997, the Commissioner now has discretion to extend the two-year period in the Act where: · the ownership of a dwelling or will is challenged · the complexity of a deceased estate delays the completion of administration of the estate · a trustee or beneficiary is unable to attend to the deceased estate due to unforseen or serious personal circumstances arising during the two-year period (for example, the taxpayer or a family member has a severe illness or injury), or · settlement of a contract for sale over the dwelling is unexpectedly delayed or falls through or circumstances outside the beneficiary or trustee's control. In your situation, your parent A's home was not disposed of within two years from their date of death due to you and your sibling's medical conditions caused by the sudden death of your parent A. Accordingly, you meet the criteria in which the Commissioner may exercise his discretion to extend the two-year period in which a deceased's main residence must be disposed of. The Commissioner's considers that it is appropriate to exercise his discretion on this occasion to extend the two-year period to the date the property was disposed of.