Private ruling: Capital gains tax and deceased estate
Date of advice: 11 May 2018
Published: July 2018
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time until settlement date? | A1: Yes Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time until settlement date. Further information on the relevant factors and inherited dwellings generally can be found on our website ato.gov.au and entering Quick Code QC52246 into the search bar at the top right of the page.

Relevant facts and circumstances: The deceased came to Australia from overseas and purchased property as their main residence in 20XX. The deceased resided in this property for thirteen years up until their date of death (DOD) in 20XX. This property was not used to produce income and no other property was owned. The deceased executed a will in 19XX and appointed a trustee. Relatives were named as beneficiaries in the will, some of whom lived in Australia and overseas. Each beneficiary had equal shares in the deceased’s estate. The trustee was notified of the deceased’s death and in 20XX this trustee renounced their position as the deceased’s trustee through the Court. As the trustee renounced their position, a relative who was a named beneficiary had to commence the administration, which took time. The Court granted this to the relative in 20XX. Through these proceedings the deceased’s relative nominated a new trustee to administer the estate and this was eventually granted by the Court in 20XX. The new appointed trustee commenced administering the deceased’s estate and after exhaustive attempts could not locate the specific named beneficiaries that still resided overseas. The trustee then commenced preparing the property for sale and it was at this time identified two caveats were lodged by a relative in 20XX. The caveats were eventually withdrawn and occurred in 20XX. A condition of the caveats being withdrawn was the assets of the deceased’s estate were not to be distributed until the six month period had elapsed; 20XX. Once the six months passed, the trustee prepared the property for sale and it was at this time the trustee was informed by a third party that there was a squatter living on the property. This squatter was a relative and an arrangement had to be made with this relative to vacate the property. This relative eventually vacated the property in 20XX. The property was prepared for sale and placed on the market at public auction in 20XX. Settlement occurred 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10, | Income Tax Assessment Act 1997 section 118-195 and | Income Tax Assessment Act 1997 subsection