Private ruling: Commissioner’s discretion to extend the two year limit to dispose of a dwelling
Date of advice: 27 November 2018
Published: March 2019
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1July 20XX

Ruling: Q1: Will the Commissioner allow an extension of time to XX/mth/20XX for you to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal? | A1: No.

Relevant facts and circumstances: The deceased acquired a dwelling located at no/street/suburb/State A, postcode (the dwelling). The deceased passed away on XX/mth/20XX. The dwelling was the deceased’s main residence. The deceased had ABC and DEF listed as Executors and beneficiaries in the will dated xx/mth/20XX. XYZ is listed in will as a beneficiary of a Country A bank account only. Probate was applied for, was unopposed and granted by Supreme Court of State A, xx /mth/20XX. The title of the dwelling was transferred into the names of ABC and DEF as the beneficiaries of the deceased’s estate. The will of the deceased did not provide XYZ a life interest or a right to reside in the dwelling. ABC and DEF continued to allow XYZ to reside in the dwelling after the deceased passed away. The dwelling was occupied by XYZ for a number of years prior to the death of the deceased. XYZ lived as a boarder in a self- contained area and paid board and lodgings to the deceased from 20XX to date of deceased’s death. ABC and DEF entered into a verbal agreement that XYZ could remain living at the dwelling for approximately XX-XX months from the date of deceased death. Letter supplied with private ruling application dated XX/mth/20XX has XYZ saying that he agrees to continue to pay the agreed rental rate until XYZ vacates. Mth/20XX being XX months after date of death, ABC and DEF met with XYZ to discuss finding XYZ alternative accommodation. XYZ in mth/20XX lodged a claim via Supreme Court State A equity division to commence a family provision claim, parties agreed to discontinue the proceedings via a settlement which they agreed that XYZ shall continue to reside in the dwelling until XYZ arranges alternative accommodation, which XYZ must do by no later than xx/mth/20XX. If XYZ vacates the property prior to XX/mth/20XX, ABC and DEF must pay XYZ the sum of $XXX. XYZ moved out of the dwelling xx/mth/20XX. The dwelling was recently sold and settlement occurred on xx/mth/20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 118-130(3) | Income Tax Assessment Act 1997 section 118-195