Private ruling: Capital gains tax – deceased estate – Commissioner’s discretion to extend the two year period
Date of advice: 18 April 2019
Published: June 2019

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 two year period until the date settlement occurred on the sale of the Property? | A1: Yes. Having considered your circumstances, and the relevant factors, it is viewed that the Commissioner will allow an extension of time given that settlement on the sale of the Property occurred only a short time after the two year period following the date the Deceased passed away. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au

Relevant facts and circumstances: Person A acquired the Property after 20 September 1985, which was their main residence at the time they passed away. Person A (the Deceased) passed away a number of years after they had purchased the Property. In accordance with the Deceased’s Will, you, being Person B a child of the Deceased, were appointed as Trustee of the Deceased’s Estate. Activities needed to be undertaken to get the Property in a condition suitable for sale prior to it being put on the market in addition to dealing with the Deceased’s personal belongings. You reside a significant distance from the Property and operate your own business which limited the time you could spend in relation to those activities. Probate was granted a number of months after the Deceased had passed away. The Property was put on the market shortly after probate had been granted with a potential purchaser being found around two and a half months later. However a child of the Deceased, Person C, indicated that they wished to purchase the Property. Person C sourced funds to purchase the Property after a number of weeks and a contract of sale was entered into around two years after the Deceased had passed away, with settlement occurring after a short period.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 118-130(3) | Income Tax Assessment Act 1997 section 118-195