Private ruling: Capital gains tax and deceased estate.
Date of advice: 6 June 2019
Published: July 2019
Ruling period: Year ending 30 June 2019

Ruling: Q1: Will the Commissioner exercise his 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. In this instance the property was not sold in the two year period due to unforeseen circumstances out of your control as executor of the estate. Having considered these circumstances the Commissioner will apply the discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time.

Relevant facts and circumstances: Two individuals jointly owned a property that was less than two hectares in size. The property contained a dwelling. The two individual passed away at the same time. The property was purchased pre-CGT and at the time of their passing the dwelling was their main residence. The dwelling was to be equally shared between a number of beneficiaries. You made numerous attempts to sell the dwelling, however due to family issues and other factors outside of your control you were unable to sell the dwelling within the two year period. The dwelling was subsequently sold and settled quickly once the issues were resolved, more than two years after their passing. The dwelling has not been used to derive assessable income.

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