Private ruling: Capital gains tax – deceased estate – two year discretion
Date of advice: 9 January 2019
Published: April 2019
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 extend the two year period? | 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. 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 facts and circumstances: The deceased’s Will appointed the Trustee and Guardian as the executor. The deceased acquired a property after 20 September 1985. The property was the deceased’s main residence at the time of the death and has not been used to produce assessable income. The deceased gave share of the net residency estate to the beneficiaries. The property has remained vacant from the date of death until date of settlement of property. The executor transferred the property to the beneficiaries more than two years after the deceased’s death. The property was sold and settlement has occurred. The beneficiaries had to constantly follow up the executor in relation to administration of the assets of the Estate, the main asset being the property. The beneficiaries have never been provided with reasons why the administration of the estate took over two years from the date that the grant of probate was issued, but found themselves completely in the hands of the executor.

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