Private ruling: Capital gains tax and deceased estate
Date of advice: 24 May 2018
Published: July 2018
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 20XX

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 until settlement date? | 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 purchased a pre-CGT property in 19XX and had 100% ownership. This dwelling was not the deceased’s main residence. During the deceased’s lifetime a total of 5 properties were purchased. The deceased’s date of death (DOD) was in 20XX. The deceased had a will and a relative was appointed as a joint executor. Instructions in the will included specific properties were to be bequeathed to beneficiaries. In 20XX the will was contested by a relative and has led to a lengthy legal proceeding which is still ongoing. As appeals and motions were lodged in court this prevented any sale or transfer of the properties including the specific bequests to the beneficiaries. In 20XX the court granted probate to the executors. An appeal was lodged against this order. An appeal hearing was eventually heard in 20XX, allowing the executors to place a number of properties on the market that had formed part of the deceased’s residual estate. An application was filed with the court to prevent the sale of these properties, but this application was dismissed. The property was eventually sold 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).