Private ruling: Capital gains tax - deceased estate - discretion of two year period discretion
Published: May 2013
Ruling period: To 30 November 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) in your particular circumstance? | A1: Yes. Extension granted to a specified date

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Your parent passed away approximately two years. You were your parent's carer. Your parent owned a dwelling which was their main residence. You now suffer several medical conditions as a result of the death of your parent, which has affected your capacity to deal with the disposal of your parent's dwelling. One of your children has needed your support as they were unemployed. Your child is now employed and to assist them you care for your grandchild whilst your child is working. You also work part time. Your eldest child is coming to reside with you shortly. The dwelling will be listed with a local real estate agent. The dwelling will be disposed of by a specified date.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 118-195.

Reasons for decision: Summary: Due to recent changed to section 118-195 of the ITTA 1997, the Commissioner now has discretion to extend the two-year period in the Act where: · the ownership of a dwelling or will is challenged · the complexity of a deceased estate delays the completion of administration of the estate · a trustee or beneficiary is unable to attend to the deceased estate due to unforseen or serious personal circumstances arising during the two-year period (for example, the taxpayer or a family member has a severe illness or injury), or · settlement of a contract for sale over the dwelling is unexpectedly delayed or falls through or circumstances outside the beneficiary or trustee's control. In your situation, you now suffer from several medical conditions as well as providing support for your family which has affected your ability to dispose of the dwelling within the two years of your parent's date of death. Accordingly, you meet the criteria in which the Commissioner may exercise his discretion to extend the two-year period in which a deceased's main residence must be disposed of. The Commissioner considered that it is appropriate to exercise his discretion on this occasion and allow until a specified date to dispose of the dwelling.