Private ruling: Capital gains tax – deceased estate – Commissioner’s discretion to extend the two year period – main residence exemption
Date of advice: 16 April 2018
Published: July 2018
Ruling period: Period ended 30 June 2015
Date scheme commenced: 01 July 2014

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 QC52250 into the search bar at the top right of the page.

Relevant facts and circumstances: An individual died, they had a main residence, and the property remained vacant until settlement. The property was jointly owned. The individual became the sole owner of the property as a result of survivorship. The deceased acquired a 50% interest in the property before 20 September 1985 and the remaining 50% interest was acquired after 20 September 1985 An appraisal of the residence was conducted; the value of the property was determined. Probate was granted. Repair work was completed to the property including but not limited to the following: Structural repairs to the upper and lower balconies, Rotted Lining boards to the underside of the verandas ceilings, Veranda floorboards needed replacing, sanding and staining, The garage roof had rusted through and needed to be replaced, Trim boards to the outer side of the home had rotted needing to be replaced, The electricity to the home kept blowing the fuse box circuit breakers and meant digging up to find the underground power leak, and All of the storm water drains had to be unblocked and sinks in the house unblocked. The executor’s partner had Thyroid cancer removed. They were put into isolation due to the radioactive isotope treatment. At the same time they had gallbladder issues resulting in its removal. Their recovery was very slow from the gallbladder removal. A contract for sale of the property was entered into. The property sold.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 subsection 118-130(3) | Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 subsection 118-195(1)