Private ruling: CGT 2 Year Exemption Deceased Estate
Date of advice: 11 December 2017
Published: April 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 01 July 2016

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two-year limit to disregard a capital gain on the sale of the deceased taxpayers main residence. | 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 QC 52245 into the search bar at the top right of the page.

Relevant facts and circumstances: A person died. A person had joint ownership of a property. A person became the sole owner of the property. Probate was granted. An individual was advised by their lawyer who completed probate that they did not have the power to sell the property under the Will, until the Part IV of the Administration and Probate Act 1958 had been addressed. An organisation indicated a claim against the estate would be pursued. The organisation was granted several extensions prior to lodgment of their claim. Documentation was severed. An individual had surgery, with 10 days of confinement and a six week period of rehabilitation. The individual was required to attend a facility for weekly rehabilitation and hydrotherapy. The surgery was unsuccessful resulting in an operation. Recovery from this surgery the individual was required to attend weekly hydrotherapy and physiotherapy visits. A contract for the sale of the property was signed. Property titles were changed into the name of the Executor. Settlement was delayed due to a financial delay on behalf of the purchaser. Settlement on the property was finalised. An approved compromised occurred. The property remained empty from the date of death and has not been used to produce income.

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)


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