Private ruling: Capital gains tax
Date of advice: 11 October 2021
Published: December 2021
Ruling period: Year ended 30 June 2021
Date scheme commenced: 1 July 2020

Ruling: Q1: Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time to the two-year main residence exemption on a dwelling? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time.

Relevant facts and circumstances: The deceased died several years ago. The property was inherited by the deceased a few years prior to their death. The property was the deceased's main residence for the whole of their ownership period. Probate was granted in the same year that the deceased died. The delay in selling the property was due to part of the property was resumed by the local council after the date of death. Due to significant delays in this process being finalised, the property was unable to sell the property until this process had been completed due to the potential significant effect it would have had on the potential sale price and interested parties. Some relevant dates which provide an outline of the time period taken between when the Estate was notified that there was to be a part resumption of the property, to the date of completion and the approval of the Taking of Land Notice is as follows: An email was provided to the Estate that the local councils were intending to resume a portion of the land attached to the property for road widening. Confirmation by the local council that a Notice of Intention to Resume the land was to be issued Email from the local council confirming that the Department of Resources had approved the acquisition of land, and that a Takin of Land Notice was to be published in the Government Gazette. In addition to these key dates valuations were required to be obtained of the property to determine reasonable compensation for the land. This all took time and given there was a pandemic delays occurred. The property was never used to produce income. The property was less than 2 hectares. Settlement took place several months after the two years period had passed.

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