Private ruling: Capital gains tax, deceased estate, 2 year discretion
Date of advice: 16 April 2018
Published: July 2018
Ruling period: Period ending 30 June 2018
Date scheme commenced: 1 July 2017

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 2 year period until 29 September 2017? | A1: 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 29 September 2017. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC52250 into the search bar at the top right of the page.


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


The deceased xxxxx died on or about xxxx. | The deceased’s home at xxxxx was at all times her principal place of residence. | The property was acquired by the deceased after 20 September 1985. | The deceased’s home remained vacant from the time of death until sale of property. | The solicitor contacted the Executor. | The Will was a Will kit completed by deceased and the distribution of the estate was not clear due to the wording used by the deceased in xxxx will. | The Executor took the view that the Will was valid and that xxxx was intended to be the sole beneficiary of the estate. | The deceased’s xxxx took view that the Will was not valid, or that the Will did not intend to benefit the Executor xxxx as a beneficiary, and thus if successful, the deceased’s xxxx would be entitled to the whole of the estate pursuant to the laws of intestacy. | The Executor claims that xxxx is the xxxx of the deceased. | The xxxx of deceased claims the Executor is not xxxx. | The parties entered into long negotiations commencing in xxxx and an agreement was reached as to how to deal with the estate. The final Deed of Family Arrangement (Deed) was sent for signing on xxxx. | The Executor signed and returned the Deed to solicitors in xxxx. | The deceased’s xxxx signed and returned Deed to solicitors in xxxx after being chased up by solicitors. The xxxx informed solicitor that xxxx wanted to retain the house as a beneficiary pursuant to the Deed and that the balance of funds would be paid xxxx. | The xxxx of deceased had lodged a Caveat with the Probate registry to prevent Executor from applying for Probate. | The Executor was provided the keys of property in xxxx. Executor found that the xxxx significant damage to the property, causing loss to the Estate. All steps were taken by the Executor to communicate the damage to the xxxx. All steps were taken by the Executor to finalise the xxxx purchase of the property. | The Caveat being lodged meant that a witness of the will needed to be found and further evidence as to when the deceased was last seen alive and when xxxx deceased body was found. | In April 2017 the Executor’s solicitor was provided all the documents and information from the xxxx, witness, coroner and police that were required to apply for a Grant of Probate. | The solicitor finalised and lodged the application for Probate on xxxx. | Probate was granted xxxx. | The Executor took all steps to administer the estate and, as the mother and her son failed to finalise the sale/transfer of the house to themselves, the Executor listed the property for sale with a real estate agent and the property sold. | Settlement of deceased’s property occurred on xxxx.