Private ruling: Capital gains tax
Date of advice: 13 September 2017
Published: January 2018
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion to extend the 2 year exemption period under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) in relation to the two hectares of the property you nominated as your main residence? | 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 QC52250 into the search bar at the top right of the page.

Relevant facts and circumstances: The deceased acquired a property. The property was not acquired for development or profit making purposes. A portion of 2 hectares was nominated as the respective taxpayer’s main residence for the purposes of the main residence exemption. The land was rezoned from being residential by the council which resulted in the land value increasing. You had agreed to sell the property to a company but they went into liquidation before the sale was completed. You engaged a number of agents in an attempt to find a buyer. Due to the new zoning, prospective buyers were required to undertake additional investigations and due diligence not normally required for residential acquisitions that delayed the selling process. A buyer was found and the property was sold outside of the two year period. The property was sold with the existing dwelling that you occupied as your main residence.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 118-195(1)