Private ruling: Capital gains tax – deceased estate
Date of advice: 14 December 2017
Published: May 2018
Ruling period: 30 June 2018
Date scheme commenced: 1 July 2017

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: You purchased property and this became your main residence up until your date of death. In 20XX you were hospitalised and not long after this, your property was damaged by a natural disaster. You passed away in 20XX. Your trustee commenced administering your estate in 20XX. Due to the damage caused from the natural disaster, your property was unliveable and an insurance claim was lodged. A dispute commenced between the beneficiaries and the insurer, regarding the claim and the cost of works that the insurer were to cover. A settlement was agreed on in 20XX. The property was to be put up for auction but there were further delays as access to the property was restricted due to the damage; the structural integrity of the property and damage to sheeting containing asbestos. A structural engineer was employed by the beneficiaries to provide direction and resolution. The property was eventually sold at auction and settlement occurred in 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 118-195(1).