Private ruling: Capital gains tax
Date of advice: 19 February 2019
Published: May 2019
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

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 two year period? | 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 www.ato.gov.au

Relevant facts and circumstances: The house is a pre-CGT asset. The wills were made via a law company. The deceased died. The property was left in the decease’s will to their spouse and naming them as executor of their will. As the spouse had dementia, the will was not considered fit for purpose as The Powers of Attorney/will did not cover this matter specifically. The lawyers advised executors to wait till after the wife’s death for the transfer of the title in order to sell property. The spouse died. New lawyers were consulted as the original lawyers had not been successful with the transfer work. The new lawyer was not successful in the transfer matter either. The new lawyer negotiated with the first law firm re the issue because of inadequacy in the framing of the wills. The Executor of the estates suffered a critical health crisis. The original lawyers applied for a Grant of Letters of Administration for the Estate of the deceased and to transfer the property into the names of the personal representatives of the property as the deceased spouse was leaving the property to them in their will. The Supreme Court advised of further difficulties and provided executors/beneficiaries with two options to progress the matter. The first option was going to take months so a faster option was taken. A Judge appointed the beneficiaries as administrators of the deceased’s estate in order to expedite the sale of the property. Notice that Transmission document had been completed by Titles Office and Registration Confirmation Statement given in the names of the Representatives. Representatives were given a copy of the Grant of Letters of Administration. The property was placed on the market immediately after the executors were appointed. The house was listed. The property is less than two hectares. The property has never been rented out or used to produce income. The house sold and settled.

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