Private ruling: Commissioner's discretion to extend the two year time limit to dispose of an inherited dwelling
Date of advice: 22 July 2020
Published: August 2020
Ruling period: Year ended 30 June 2020
Date scheme commenced: 1 July 2019

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 to the two year period to dispose of dwelling A? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time to dispose of dwelling A. This also applies to up to two hectares of adjacent land that is used in association with dwelling A. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au

Relevant facts and circumstances: Person A acquired an ownership interest in a property after 20 September 1985. Person A owned a one third share as tenants in common with Person A's neighbours, Person B and Person C. There were two dwellings on the property. Person A lived in one of the dwellings as their main residence ( dwelling A ). Person A passed away ( the deceased ). Probate was granted two months later. Rental income was not derived from dwelling A after the deceased's death. The Executor of the estate offered the deceased's share of the property to Person B and Person C to purchase if they desired. They declined this offer. Person A and Person C actively impeded the sale of the property, taking steps to prevent the Executor from placing it on the market and gaining access to the property. The Executor was forced to apply for a Personal Safety Intervention Order against Person B and Person C due to their aggressive actions. The Executor was then required to attend a Tribunal to mediate the dispute and force the sale of the property. The dispute was resolved and immediate steps were taken to sell the property. A contract of sale was entered into and settlement for the sale of the property occurred two years and ten months after the deceased's death.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 118-110 | Income Tax Assessment Act 1997 Section 118-120 | Income Tax Assessment Act 1997 Section 118-195