Private ruling: Capital gains tax – deceased estate – Commissioner’s discretion to extend the two year period – main residence exemption
Date of advice: 26 March 2019
Published: May 2019
Ruling period: Year ending 30 June 2018
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 allow an extension of time to the two year period until settlement? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au.

Relevant facts and circumstances: The deceased passed away in 20XX. The deceased acquired a property prior to 20 September 1985 and elected it as their principle place of residence along with their spouse until their death. The deceased had a will. The whole estate was left to the deceased two children, in equal shares. Probate was granted in April 20XX. The property was mostly vacant and did not produce any income from the date of death until the date of sale. The settlement of the property was delayed because the purchasers experienced delays in obtaining the loan to purchase the property. This prevented the dwelling being sold within two years from the deceased’s death. The dwelling was sold in 2017. Settlement occurred in 2017.

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