Private ruling: Capital gains tax - deceased estate - two year discretion
Date of advice: 10 December 2018
Published: April 2019
Ruling period: Year ended 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner allow an extension of time to for you to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au


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 | Income Tax Assessment Act 1997 subsection 118-195(1)


Relevant facts: The deceased acquired a dwelling (the dwelling). | The deceased passed away in 2013. | The dwelling had been the deceased’s main residence prior to passing away. | The dwelling has not been used to produce income. | The deceased’s Will appointed their two children, ‘A’ and ‘B’ as executors. | ‘A’ was made bankrupt and a trustee in bankruptcy was appointed in 2012. | A period of delay ensued due to protracted negotiation between the trustee and the trustee in bankruptcy as to the administration of the estate. The Trustee in bankruptcy asserted that they had an equitable interest in the estate. | ‘C’, the spouse of ‘B’ eventually agreed to apply for letters of administration of the Will of the deceased. Letters of administration were granted in 2014. | ‘A’ renounced their role as executor. | ‘A’ resided at the dwelling during their period of bankruptcy. | ‘A’ was a dependent of the deceased. | The administrator suffered from some serious personal circumstances which delayed the administration of the estate. | The administrator explored the possibility of selling the dwelling to a developer. A neighbouring property was owned by a developer and a potential sale was discussed however a sale did not eventuate. | The dwelling was prepared for sale and a contract for sale was entered into in 2017. | Settlement occurred in 2018.