Private ruling: Capital gains tax and Commissioner's discretion for deceased estates
Date of advice: 21 July 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 to 20XX? | 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 20XX. Further information on the relevant factors and inheriting a dwelling generally can be found on our website ato.gov.au and entering Quick Code QC17195 into the search bar at the top right of the page. | Q2: Can you disregard any capital gain or loss that arises from the disposal of the property under section 118-195 of the ITAA1997? | A2: Yes. As the extension has been granted above any capital gain or loss from the sale of the property will be disregarded.

Relevant facts and circumstances: The deceased purchased a property before 20 September 1985. This property was their main residence until they died. They passed away on or about mid 20AA. Their will appointed the Public Trustee the executor of their estate. The property remained vacant and was not used for income producing purposes at any point during the deceased’s ownership or after their death. Due to legal action commenced by the beneficiaries sale of the property was delayed. The dispute was settled in 20WW with a Deed of Arrangement. The property was sold in early 20XX and settled in 20XX.

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