Private ruling: Deceased estate and Commissioner's discretion in extending the two year period
Date of advice: 18 August 2017
Published: November 2017
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

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 late 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 late 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 QC52250 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 acquired the property before 20 September 1985. This property was their main residence until they died. They passed away on or about mid 20AA. The property never produced income and remained vacant from the day they died until it was sold. The executor was delayed in selling the property as they had difficulty establishing the beneficiaries of the estate due to the Will being hand written and difficult to read. The executor gained the court’s assistance in interpreting the Will. The property was sold in late 20XX and settled soon after.

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