Private ruling: Two year exemption from capital gains tax for a deceased main residence
Date of advice: 2 October 2019
Published: November 2019
Ruling period: Year ended 30 June 2020
Date scheme commenced: 7 December 2010

Ruling: Q1: Will the Commissioner exercise the discretion under 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 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: Person A and Person B owned a dwelling as tenants in common. Person A passed away on more than two years ago. The property was acquired by the Person A and Person B after 19 September 1985. The dwelling was not used to produce assessable income. The dwelling was Person A's main residence at the time of their death. The deceased's will provided Person B a life interest in relation to their interest in the dwelling. The will provided for a number of beneficiaries which did not include Person B in relation to 50% interest in the dwelling. Person B also held a 50% interest dwelling and resided there until their death. Probate of Person B's will was granted. The dwelling was listed for sale shortly after probate was granted and was subsequently sold and settled more than two years after Person A's death. The dwelling sold for a specified amount and you have provided details of the relevant amount related to Person A's interest. The dwelling is on land less than two hectares.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-110 | Income Tax Assessment Act 1997 section 118-110 | Income Tax Assessment Act 1997 subsection 118-130(3) | Income Tax Assessment Act 1997 subsection 118-195(1)