Private ruling: Extension of time for the two year Capital Gains Tax exemption.
Date of advice: 13 May 2019
Published: June 2019
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner allow an extension of time to a specific date 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 passed away mid 2016. You are the sole beneficiary under the will. The property asset was transferred to you in early 2017. The property was the main residence of the deceased and was acquired about 50 years before their death. The property was not used to produce rental income and remained vacant after their death. The property was not maintained and was in very poor condition and the land overgrown with noxious weeds. The property is large in size and is zoned as emerging community. You began to liaise with a real estate in early 2017 in an attempt to sell the property however you did not receive any offers for the property until after the council approved the development application. Between early and mid-2017 you had the property cleared of weeds and other green waste, costing approximately $XX,XXX. You met with a real estate agent in mid 2017 who advised you that the ecological and waterway issues with the property would be an impediment to selling the property. The agent advised you to pursue a development application with the local council in order to address the risks associated with the property as the current state of the property was very poor and uninhabitable for purchasers or renters. Following the receipt of the ruling you lodged a development application with the Council to divide the property into a small number of lots. A development application pre-lodgement meeting with the Council occurred in 2017. The delay in the development application being approved by the Council was due to ecological and complex planning issues requiring expert consultation. A Town Planning Consultant has confirmed that the dwelling was in poor condition and uninhabitable. No land works were undertaken or separate titles issued for the property. The development approval was granted on late 2018. You appointed a real estate agent late 2018 and additional agents in early in 2019. The initial asking price was $X. The property was sold for considerably less than $X to expedite a sale and settled early in 2019.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 104-10(5) | Income Tax Assessment Act 1997 subsection 118-195(1) | Income Tax Assessment Act 1997 subsection 128-50(2) | Income Tax Assessment Act 1997 paragraph 152-10(1)(b) | Income Tax Assessment Act 1997 subsection 152-10(1). | Income Tax Assessment Act 1997 subsection 152-80(3)