Private ruling: Capital gains tax - deceased estate - extension of two year period - disposal
Published: October 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Would the Commissioner exercise the discretion in section 118-195 of the Income Tax Assessment Act 1997 in your particular circumstances? | A1: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 118-195

Reasons for decision: Summary: Due to recent changes to the Income Tax Assessment Act 1997 (ITAA 1997), the Commissioner now has discretion to extend the two year period in the Act where: · The ownership of a dwelling or a will is challenged; · The complexity of a deceased estate delays the completion of administration of the estate; · A trustee or beneficiary is unable to attend to the deceased estate due to unforeseen or serious personal circumstances arising during the two-year period (for example, the taxpayer or a family member has a severe illness or injury); or · Settlement of a contract of sale over the dwelling is unexpectedly delayed or falls through for circumstances outside the beneficiary or trustee's control. These examples are not exhaustive. In this case, you were unable to dispose of the property within two years of the deceased's death due to delays in selling the property as the local real estate market conditions were unfavourable. Accordingly, you do not meet the above criteria and the Commissioner would not exercise his discretion to extend the two year period.

Relevant facts: Your parents acquired their family home prior to 20 September 1985. | Your surviving parent passed away in the 200X income year. | You are a beneficiary of your late parent's estate. | Your late parent's will did not make any provision for a beneficiary to have a right to reside in the house. | You have provided a number of documents which forms part of this private binding ruling. | The house was listed for auction in the 20XX income year and failed to sell. | A contract for sale was signed after a period of time; however the purchaser failed to complete the contract. | A new real estate agent was engaged to sell the house. | The house was subsequently sold in the relevant income year. | The delays in disposing of the house were due to a downturn in the local real estate market. | The sale of the property has resulted in a capital gain.