Private ruling: Two year exemption from capital gains tax for a deceased main residence
Date of advice: 13 June 2019
Published: August 2019
Ruling period: 1 July 2018 to 30 June 2019
Date scheme commenced: February 2011

Ruling: Q1: Will the Commissioner exercise the discretion under 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 a short 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 was the sole owner of a property. The dwelling at the property (the dwelling) was the deceased's main residence at the time of their death. The dwelling is located on land that is less than two hectares. The deceased died intestate more than two years ago. Lawyers were initially engaged to provide legal services in relation to the administration of the estate, but ended their engagement. Due to extenuating circumstances, an administrator could not be appointed. The lawyers made attempts to have the estate administered, but were unsuccessful, mainly due to personal circumstances in relation to the two beneficiaries. One of the beneficiaries has limited capacity and is under the care of a state trustee. Letters of Administration for the Estate was granted to the administrator. Once Letters of Administration was granted, you took steps to arrange for the sale of the dwelling. The dwelling was sold under contract and settlement occurred more than two years after the deceased's death. The dwelling was not used for income producing purposes from the date of the deceased's death until it was sold.

Relevant legislative provisions: Income Tax Assessment Act 1997 subdivision 115-A | Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 section 104-10