Private ruling: Deceased estates and the capital gains tax (CGT) main residence exemption
Date of advice: 27 March 2019
Published: May 2019
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au

Relevant facts and circumstances: The deceased purchased the property as tenants in common with their spouse on a date after 19 September 1985. The deceased and their spouse lived at the property and treated it as their main residence. The deceased passed. The spouse continued to live in the property as their main residence until they passed. Under the will of the deceased, their two children became the executors of the estate. One of the executors became a declared bankrupt and the Trustee in Bankruptcy lodged a caveat over the property. The caveat was removed upon settlement of the property. There were two separate sets of legal proceedings commenced by each executor in relation to both estates. Alternative dispute resolution was attempted by the parties, but did not resolve the dispute. The matter was set down for a five day hearing, but settled on the first day with an administrator appointed to sell the property. The property was sold at auction and settled more than 2 years after the deceased passed.

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