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

Ruling: Q1: Will the Commissioner exercise the discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time? | 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: The deceased’s spouse purchased property in 19XX as the sole owner and this became the deceased’s main residence. In 19XX the deceased acquired 100% sole ownership of this property, and it still remained their main residence. In 20XX the deceased moved out of the property into a nursing home until their date of death in 20XX. The deceased did not own any other property and the dwelling did not produce income at any time. The deceased left a Will and appointed two executors to the deceased’s estate. Probate was granted in 20XX. A relative also lived at this dwelling for many years and treated this property as their main residence. There was no right to occupy provision stipulated in the Will. The deceased’s estate then became subject to two court proceedings and these matters took time to resolve. Both court proceedings were eventually finalised in 20XX. The property was then prepared for sale. The property was sold at auction and settlement occurred 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).