Private ruling: Capital gains tax - deceased estate two year discretion
Date of advice: 16 May 2019
Published: July 2019
Ruling period: Year ending 30 June 2019
Date scheme commenced: 01 July 2018

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and extend the two year period. | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au

Relevant facts and circumstances: The deceased died intestate. At the time of death, the deceased resided in the property. The property was previously owned by the deceased’s sibling. The deceased had a right to reside in the property under the terms of their siblings Will. Beneficial ownership of the property passed to the deceased with the property to be held on trust by the second trustee. The deceased used the property as their main residence and the property was not used for income producing activities. The application for a grant of letters of administration was comprehensive and the grant did not issue until XXXX to the deceased’s relative. The ownership of the residential property was contested. Final opinion on the beneficial ownership of the property was received, stating the deceased received beneficial ownership of the property and that it was an asset of the estate. Draft transfer and transmission documentation was submitted to titles office. Final transfer documentation was forwarded to trustee who refused to sign the documents. Transfer and transmission documentation lodged for registration. The administrator contacted real estate agents and the property was listed for sale. As the administrator was not located in the area, they relied on the agents experience and local knowledge of market conditions. The agent disclosed that buyers had concerns regarding the property’s history as it had been the location of fatalities, but did not recommend a decrease in price at that time. The agent suggested lowering the price, to which the administrator immediately accepted in line with their reliance on the estate agents experience. Sale and settlement for the sale of the property has now occurred.

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