Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the Property and disregard the capital gain you make on the disposal under section 118-195 of the Income Tax Assessment Act 1997 ?
No. This private ruling applies for the following period: 1 July 20XX to 30 June 20XX. The scheme commences on: 1 July 20XX.
In XX/20XX, the Deceased passed away. As at the date of death, the Deceased owned the Property. The Property was acquired prior to 20 September 1985 and was less than 2 hectares in land size. In XX/20XX, probate of the will was granted to you as the executor. You took up temporary residence in XX/20XX at the Property. You stayed at the Property for various lengths of time to perform maintenance tasks to prepare the Property for sale. The lengths of time you stayed at the Property was between XX to XX weeks, and longer stays of XX to XX months between 20XX and 20XX. Your usual home is over XX kilometres from the property, and you returned there at times. Damage occurred to the Property in XX/20XX. An insurance investigator assessed the damage and approved the claim but discovered problems not covered by insurance. Repairs and maintenance tasks were undertaken. Access to the property was restricted at various times due to natural disasters and COVID-19 lockdowns and restrictions. You signed an agency agreement with a real estate agent on XX/XX/20XX and the property was then listed for sale. Your solicitor prepared a draft contract and sent this to the selling agent on XX/XX/20XX.
The agency agreement was re-signed every XX months as the agency was reengaged to continue with marketing until the sale of the property was achieved. The property was advertised locally in XXX. In XX/20XX, the listing was removed from the online websites for XX days before re-listing in XX/20XX. All other marketing was always active. You held appointments, inspections, and open homes during the period between the listing and the eventual sale. You received two offers on the Property in XX/20XX which did not eventuate. Between XX/20XX and XX/20XX some restrictions on face to face real estate appointments were in place. In XX/20XX, you received a third offer on the Property which you accepted after brief negotiations. Settlement of the contract for sale occurred in XX/20XX.
Income Tax Assessment Act 1997 section 118-195 Summary An extension to the 2 year period to dispose of a dwelling is generally only allowed where the dwelling could not be sold and settled within two years of the deceased's death due to reasons beyond your control that existed for a significant portion of the first two years. Detailed reasoning Subsection 118-195(1) of the ITAA 1997 provides that a capital gain or capital loss made on a dwelling acquired from a deceased estate may be disregarded if: • The property was acquired by the deceased before 20 September 1985; or • The property was acquired by the deceased on or after 20 September 1985 and the dwelling was the deceased's main residence just before the deceased's death and was not then being used for