Private ruling: Main Residence Exemption
Date of advice: 13 June 2018
Published: August 2018
Ruling period: 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 allow an extension of time to the two year period? | 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. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC17195 into the search bar at the top right of the page.

Relevant facts and circumstances: You and your spouse inherited property from the deceased. The deceased passed away in late 2014. Probate was granted in early 2015. There was also a mortgage registered upon the property although no monies owed under this mortgage. The bank would not discharge this mortgage without the authority of all registered proprietors and the other party refused to sign any such authority. In addition the duplicate title could not be located and you could not apply for a substituted certificate of title without the cooperation of the other party which was not forth coming. The duplication title was finally located in about mid-2016. At this stage you again sought a discharge of the mortgage based upon the signature of executor only and the bank provided to you. Further efforts to negotiate with the other party with several offers to purchase their share of the property were rejected. An agreement was finally reached in late 2016 and received a signed transfer letter from the solicitor dated late 2016. It was not until late 2016 that the entire title was registered to you and your spouse and property could now be put on the market for sale. Settlement of the sale occurred outside the two year period.

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