Private ruling: CGT – Deceased estate – Main residence exemption – 2 year extension
Date of advice: 11 May 2018
Published: July 2018
Ruling period: Year ending 30 June 20XX | 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) to extend the two year time limit to X XXXXXXX XXXX to disregard the capital gain or loss made on disposal of the property? Answer; 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 X XXXXXXX XXXX.

Relevant facts and circumstances: The deceased died a few years ago. One of the main assets of the estate was the house (the property). This was the principal residence of the deceased up until the deceased moved into supported accommodation. The deceased acquired the property prior to 20 September 1985. The property was vacant from the time deceased moved into supported accommodation until the property was sold. The property has never been used to produce assessable income. The deceased left a number of Wills. The Executors of the Wills are family members of the deceased. The Wills of the Deceased relevantly provided that: ● A family member was bequeathed the property. ● On the death of the deceased, the residue of the deceased estate will be divided between a number of family members. A dispute between the Executors of the Wills arose as to which of the Wills was the final Will of the deceased. A Statement of Claim was lodged by an Executor of the Wills with a court. A defence against the Statement of Claim was lodged by another Executor of the Wills. The Executors of the Wills attended mediation which resulted in a Deed of Family Arrangement being entered into where it was agreed that the last Will was the last Will of the deceased. Probate was granted by a court. The title of the property was transferred to a family member. The family member undertook minor repairs and maintenance to the property. A developer contacted the family member seeking to purchase the property. Due to protracted negotiations on the sale price with the first developer a second developer contacted the family member. The family member entered into contract of sale to sell the property with the second developer more than two years after the death of the deceased. Settlement of the property is expected to be on X XXXXXXX XXXX.

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

Reasons for decision: Summary: The Commissioner will exercise his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time until X XXXXXXX XXXX.