Private ruling: Capital Gains Tax for Deceased Estate- Main Residence Exemption
Date of advice: 18 June 2019
Published: August 2019
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and extend the 2 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: The deceased purchased the property as a joint owner. The deceased inherited the full ownership interest of the property. The deceased passed away. Administration of the will was granted to the Executor. The beneficiary and child of the deceased sued the Executor disputing ownership interest in the property. A court agreement was reached between all parties, with the will now stipulating that the property could not be sold during the beneficiary's lifetime and the proceeds must be used to purchase another property which is to be occupied by the beneficiary on the same terms and conditions. The property was sold. The beneficiary used the property as their main residence for the entire ownership period. The property was never used for income producing purposes There were no capital improvements made to the property.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 118-195(1)