Private ruling: Deceased estates and Commissioner's discretion to extend the two year exemption
Date of advice: 17 August 2017
Published: November 2017
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Will the Commissioner exercise the discretion in section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) and extend the main residence exemption tor 20ZZ? | 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 20ZZ. 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 purchased the property before 20 September 1985. It was their main residence until they died. The deceased died in early 20XX. They left the property to their children, A and B. The title of the property was passed to A and B as beneficiaries. On or around mid 20YY B attacked A and A’s spouse. A’s spouse was seriously injured and A was almost killed. B was taken into custody. As A’s injuries were more serious they were not released from hospital until mid 20XX. B was held in custody for an extended period and the siblings were not allowed to communicate, making selling the property very difficult. It was not until B’s release that the deceased’s estate and the property could be dealt with. The sale of the property was facilitated by the siblings through their solicitors. A contract for sale on the property was signed in mid 20ZZ and the property settled in late 20ZZ.

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