Private ruling: Main residence exemption
Date of advice: 10 July 2018
Published: September 2018
Ruling period: Year ending 30 June 2018
Date scheme commenced: 1 July 2017

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 to the two year period? | 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. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC17195 into the search bar at the top right of the page.

Relevant facts and circumstances: (The deceased) passed away in early 2014. The deceased main residence was never used to produce assessable income. The deceased left the property to their two adult children (beneficiaries). One beneficiary also lived in the house and continued to do so until medically institutionalised due to ill health. This beneficiary continued to live in the house after their parent’s death and became socially isolated. By the time that their condition was identified it was well after the two years past their parent’s death. Their condition began within months of their parent’s passing. The other beneficiary was estranged from the family and had been living overseas for many years and due to their financial circumstances was unable to assist. One beneficiary was appointed as the executor of the estate and was replaced by a solicitor by Supreme Court orders in mid-late 2017. Attempts had been made by the solicitor to encourage the beneficiary to sell the house however they found it difficult to communicate with them. The property was sold as soon as possible after the solicitor was appointed and the property settled in early 2018.