Private ruling: Capital gains tax - Commissioner's discretion to extend the two-year period
Published: June 2013
Ruling period: 30 June 2014
Date scheme commenced: 1 July 2012

Ruling: Q1: Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) in your particular circumstance? | A1: Yes. Extension granted to a specified date.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 118-195.

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. Due to recent changed to section 118-195 of the ITTA 1997, the Commissioner now has discretion to extend the two-year period in the Act where: · the ownership of a dwelling or will is challenged · the complexity of a deceased estate delays the completion of administration of the estate · a trustee or beneficiary is unable to attend to the deceased estate due to unforseen or serious personal circumstances arising during the two-year period (for example, the taxpayer or a family member has a severe illness or injury), or · settlement of a contract for sale over the dwelling is unexpectedly delayed or falls through or circumstances outside the beneficiary or trustee's control. In your situation, one of the deceased's children challenged probate and a caveat was placed on the dwelling preventing you from disposing of the dwelling within the two years of the deceased's date of death. Accordingly, you meet the criteria in which the Commissioner may exercise his discretion to extend the two-year period in which a deceased's main residence must be disposed of. The Commissioner considered that it is appropriate to exercise his discretion on this occasion and allow until a specified date to dispose of the dwelling.

You are the executor and the sole beneficiary of the estate of person A (the deceased) who died almost two years ago. | The main asset contained in the deceased's will was their home. | One of the deceased's children challenged the grant of probate and they lodged a caveat on the disposal of the dwelling. | Finalisation of probate may occur shortly but there is no guarantee that it will be finalised by that date. | The dwelling has been unoccupied for two years due to the legal proceedings. | You will dispose of the dwelling by a specified date. | You have supplied a copy of documentation to support your application and this documentation is to be read with and forms part of your application for the purpose of this ruling.