Private ruling: Capital gains tax – deceased estate – Commissioner’s discretion to extend the two year period – main residence exemption
Date of advice: 12 December 2018
Published: April 2019
Ruling period: Financial year ending 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise the 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? | 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.

Relevant facts and circumstances: The deceased lived in Country A and was a citizen of Country A. In 1980 the deceased acquired a dwelling in Country A which was the deceased’s main residence. The deceased resided in this dwelling up until their date of death. This property was not used to produce income and the deceased did not own any other property. The deceased had a Will and the dwelling was left to you and a sibling as beneficiaries. Country A requires the beneficiaries to be accepted as a benefactor of the dwelling in Court. Until this occurred you were unable to sell the dwelling. The dwelling was placed on the market as soon as the paperwork was received from Country A Court confirming ownership of the dwelling by you and your sibling. Attempts were made to rent out the dwelling whilst it was vacant, however it was old and required renovations, thus you were unable to find tenants. From when the deceased passed away until the dwelling settled, you and your sibling were sharing expenses each month on the upkeep of the property. The market value of the property did not change during the relevant period.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-195