Private ruling: Capital gains tax and deceased estate
Date of advice: 20 June 2018
Published: August 2018
Ruling period: Year ending 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time until settlement date? | A1: Yes | Q2: Can you disregard the capital gain from the disposal of your inherited dwelling under subsection 118-195(1) of the ITAA 1997? | A2: 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 to disregard the capital gain on disposal of the deceased’s main residence. Further information on the relevant factors and inherited dwellings generally can be found on our website ato.gov.au and entering Quick Code QC52246 into the search bar at the top right of the page.

Relevant facts and circumstances: The deceased owned joint property for several years and this dwelling was the deceased’s main residence. The deceased became the sole owner of this dwelling from 19XX up until their date of death (DOD), and this dwelling had remained their main residence. This dwelling was not used for income producing purposes at any time. The DOD was 20XX and they had a will naming four executors and beneficiaries. Probate was granted to the executors in 20XX. The deceased own other property and assets and the complexity of the deceased’s estate delayed the completion of administration. The property was sold in 20XX and had an extended settlement date to 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).