Private ruling: Capital gains tax – deceased estate – Commissioner’s discretion to extend the two year period to dispose of an inherited dwelling
Date of advice: 13 May 2019
Published: June 2019
Ruling period: Year ended 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 allow an extension of time to the two year period? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au

Relevant facts and circumstances: The deceased acquired a dwelling before 20 September 1985. The property is less than two hectares. The deceased passed away in 20XX. The dwelling was the deceased’s main residence at the time of death. The dwelling was not used to produce assessable income. Letters of administration were granted to the administrator, within two months of the passing of the deceased. Two separate caveats were imposed on the dwelling, which prevented the disposal of the dwelling within the two-year period. The administrator undertook litigation in the Relevant Court of State A to remove the caveats. A court order to remove the caveats on the dwelling was granted two years and a half years after the passing of the deceased. The dwelling remained vacant until the administrator sold it. The dwelling was advertised and sold within one month after the court order was granted. The dwelling is to settle three years and seven days after the passing of the deceased.

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 | Income tax Assessment Act 1997 section 128-15