Private ruling: Capital gains tax – deceased estate 2 year discretion
Date of advice: 19 January 2018
Published: May 2018
Ruling period: The year ending 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and extend the 2 year period until XX November 20XX? | 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 until XX November 20XX. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC52250 into the search bar at the top right of the page.

Relevant facts and circumstances: The deceased died on xxxxx The deceased acquired (the property) with their spouse as joint tenants on xxxx. The deceased acquired full ownership of the property upon the death of their spouse on xxxxx. The property’s title remained in both names after the death of the deceased’s spouse. The Estate of the deceased lodged the notice of death of the deceased’s spouse and property transferred to the deceased on or about xxxxx. The property was the deceased’s main residence at the time of their death and has not been used to produce assessable income. The deceased’s relatives, B and C were appointed as Executors of the deceased estate. The deceased’s Will gave a “right to occupy” to B and C. The B resided at the property as B’s main residence from xxxxx until completion of the sale of the property on xxxxx. B did not use the property to produce assessable income. The property remained in the deceased’s name until property sold. Probate was delayed due to the inaction of the solicitor appointed in the deceased’s will and their refusal to release the Will to the Executors and/or the new solicitors. Failed attempts to obtain the Will made by the first solicitor and Executors until a new solicitor was appointed on xxxxx. The property was placed on market for sale in late xxxxx. A contract for sale was signed xxxxxxx, on condition that probate was granted. Clause 53 of sales contract stated that “completion of this contract is subject to and conditional upon the executors (names stated) of the estate being registered as the proprietors of the subject property. Probate was granted on xxxxxx. The property was transferred into the names of the Executors on xxxxxx. The property settled xxxxxx. Relevant legal provisions Income Tax Assessment Act 1997 Subsection 118-195