Private ruling: Capital gains tax and a deceased estate
Date of advice: 7 June 2018
Published: August 2018
Ruling period: Year ending 30 June 2017
Date scheme commenced: 1 July 2016

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 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: Your relatives purchased property in 19XX (pre-CGT 20 September 1985) and this was their main residence. In 19XX there was a relationship break down and your relative acquired the other 50% interest in the dwelling, giving them 100% sole ownership of this property. Your relative continued to reside in the dwelling as their main residence. Your relative (deceased) passed away in 20xx and it was their intention to leave this property and their estate to the named beneficiaries. Upon the deceased’s death, it was discovered the deceased left two Wills in 19XX and 20XX. Neither Will had been witnessed and executed and therefore considered invalid. You underwent a large scale of enlisting several solicitors to assist you in having the title deed transferred into the beneficiaries’ names. You also sought assistance from the Public Trustees Office whom was unable to assist you in this matter. You also had to apply to the Court to demonstrate the proof that the deceased’s prior relationship no longer existed. You then had to endure the process of proving the discharge of mortgage to have the title deeds released and transferred to the beneficiaries. This took several years and the title deeds were released on or around in 20XX. The property was prepared for sale and placed on the market in 20XX. Property settled 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).