Private ruling: Capital gains tax - deceased estate - extension of two-year period
Date of advice: 28 July 2020
Published: August 2020
Ruling period: Year ended 30 June 2020
Date scheme commenced: 1 July 2017

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? | A2: Yes

Relevant facts and circumstances: The deceased acquired property prior to 20 September 1985 (pre-CGT), which was their main residence. The deceased passed away in 20XX and did not leave a will. You and other members of the family were not able to commence administering the deceased's estate at the time of their death. An application was made to the Supreme Court and Letters of Administration were granted to you in 20XX. Repairs and maintenance were completed to enable the property to be in a saleable condition. Property was placed on the market as soon as practicable 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).


Answer: 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. As provided for in Practical Compliance Guide 2019/5, example 8; the complexity of administering the deceased estate was delayed due to the deceased not making a will; delaying the disposal of the property. Further information on inherited dwellings can be found on our website ato.gov.au and searching for Quick Code (QC) 52250.