Private ruling: Capital gains tax – deceased estate – Commissioner’s discretion to extend the two year period – main residence exemption
Date of advice: 24 January 2019
Published: May 2019
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise his discretion under section 118-195(1) of the Income Tax Assessment Act 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 until settlement. Further information about this discretion can be found by searching “QC 52250” on ato.gov.au .

Relevant facts and circumstances: The deceased died in Summer 20XX. The property (the dwelling) was purchased by the deceased in 19XX, after capital gains tax was introduced. The dwelling was used as the main residence of the deceased until death. In the Will the deceased left the dwelling to his/her children with a life interest in another property to one child. At the time of death one beneficiary signalled a potential claim against the estate and the Executors were therefore prevented from dealing in the estate assets until that claim was resolved. In Summer 20AA probate was granted. The claimant obtained leave from the court to make an out-of-time application against the estate. The final hearing on the matter was held in Summer 20BB. The dwelling was then sold with settlement occurring in Winter 20YY. The dwelling was not used for income producing purposes nor was it occupied by any relatives or other persons. There was no provision in the will to allow the dwelling to be occupied after the death of the owner.

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