Private ruling: Capital gains tax – deceased estate (two year discretion)
Date of advice: 14 June 2018
Published: August 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 two 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 deceased used the property as their main residence for their entire ownership period. The property was never used for income producing purposes. Due to the complications surrounding the terms of the will left by the deceased, this caused delays with the property being transferred to you. You had discussions with the Trustee regarding the terms of the will with regards to the transfer of the property. It was agreed at this point that a deed of family arrangement would be entered into varying the terms of the will, such that the property would be transferred to you upon execution of the agreement. The Trustee transferred the property to you and you commenced the process to put the property on the market. A contract was signed and the property was sold. You advise you will not be pursuing any future claims in relation to the estate.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 118-195(1) | Income Tax Assessment Act 1997 subsection 128-20(1)(d)