Private ruling: Capital gains tax – deceased estate (2 year discretion)
Date of advice: 20 July 2018
Published: September 2018
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and extend the 2 year period? | A1: Yes. In this case the complexities that arose in regards to finalising the estate were attributed to the delays in relation to the completion of the administration of the estate. Having considered the circumstances and the factors outlined below, the Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time.

Relevant facts and circumstances: The deceased passed away in XXXX. The property was acquired in XXXX. The deceased used the property as their main residence for the entire ownership period. The property was never used for income producing purposes. The will provided that the deceased’s residential property be given to the taxpayers in equal shares as tenants in common. The property was listed to be auctioned in XXXX. The will of the deceased was challenged by an individual and a caveat was lodged on the title of the property preventing the sale of the property. The matter was taken to court and the case was heard in XXXX. The claim was dismissed by the Court. In XXXX the property was transferred to the beneficiaries as per the will and the property was sold in XXXX. The administration of the estate was significantly delayed due to the will being challenged and the matter having to go to court.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 118-195(1)