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 for the property situated at XXXX?
No This ruling applies for the following period : Year ended 30 June 20YY The scheme commences on: 1 July 20YY
The deceased passed away on DD MM YYYY. The deceased acquired the property on DD MM YYYY. The property was the main dwelling of the deceased until X years prior to their death when they needed higher level of care, they moved to their child's house for this care. The property was situated on less than 2 hectares of land. The property was not producing assessable income. The deceased's last Will dated DD MM YYYY appointed their children as Executors and Trustees of the deceased estate. Probate was granted DD MM YYYY, approximately X months after the date of the deceased's death. One of the beneficiaries used the property from the day the deceased vacated until just prior to settlement. The beneficiary didn't have the right to occupy the dwelling under the Will. The deceased property had large amounts of rubbish which had been collected for over X years, this was completed between the periods MM YYYY to MM YYYY, within X months of the date of death. Due to Covid-19 lockdowns in XXX you faced difficulties in finding tradespeople in to do the repairs. X of the X Trustees lost their jobs due to Covid-19, which meant that there were no funds available to make the repairs.
Various repairs and maintenance were completed between the periods MM YYYY to MM YYYY; • Repair & replace all cracked, broken, missing roof titles causing water damage • Replacement off broken, cracked & missing windows throughout the house • Replacement of all faulty and damaged electrical wiring sockets and light connections to compliance level • Plumbing excavate & trench replace 60m of 100m storm water drains clearing major blockages and root growth establish flow to main barrel drain. Clear and replace faulty down pipes and guttering and connect and test all new components • Replace interior plumbing hardware in kitchen, laundry, bathroom and toilet, taps, pipes, cistern & shower. • Replacement of all pool system pump and filtration system components - pool contractor orders all parts.
• Replacement of front door and portico area all supporting timbers, weight bearing and structural components due to rotted timbers from years of water damage requiring the whole front entrance structure to be replaced including all interior and exterior ceiling supports. • Replastering and painting ceilings due to water damage and construction activity detailed above Real Estate agents were engaged on DD MM YYYY, approximately X months after the date of death. The property sold on the DD MM YYYY with settlement date DD MM YYYY, almost X months after the 2-year period had expired and X years X months after the date of death.
Income Tax Assessment Act 1997 Section 118-195 Detailed reasoning Section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) provides a capital gains tax (CGT) exemption to beneficiaries and trustees where a CGT event happened to a dwelling they acquired from a deceased estate. Subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a capital gain or loss may be disregarded where a capital gains tax event occurs disposing of a dwelling passed to a beneficiary of a deceased estate within 2-years of the deceased's date of death, or, from the deceased's death until the disposal, the dwelling was the main residence of: • the spouse of the deceased immediately before the death; or • an individual who had a right to occ