Private ruling: Income tax – capital gains tax – deceased estate - two year discretion
Date of advice: 13 December 2018
Published: April 2019
Ruling period: Year ending 30 June 2018 | Year ending 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Will the Commissioner allow an extension of time to XX/XX/XXXX 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: Your parent lived overseas and was not an Australian resident. In late 20XX they passed away. Prior to their death they told you that they wanted you to administer their estate when they died. Your parent owned a property that was their main residence. They had inherited this property from their parent, who had inherited it from their parent. It is unknown when it was first purchased, or when your parent inherited the property. You live and work in Australia. Before you could sell the property you needed to follow the inheritance laws of the country your parent lived in. This included getting the property put into your name, as trustee of the estate, so that you could sell the property. You had issues attending all of the queries in a timely matter as you lived in Australia and had to travel overseas to attend issues that were required of you. The property was transferred to you in early 20YY. After the transfer you started the sale process as per the foreign inheritance law. You had to clean the property as it had been vacant in the years following your Parent’s death. This included clearing weeds, unwanted plants and the removal of garbage that was left at the property. The property was sold for $XXX,XXXAUD. You received the first instalment of the proceeds in 20XX and the remaining amount was paid on XX XXXXX 20XX. After the expenses were taken out of the proceeds and you split the remainder with your sibling your share was $XXAUD. Your sibling is not an Australian resident for tax purposes. The property is less than two hectares. The property was not used to produce income after your parent’s death.

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