Acquiring a deceased estate will require you to understand many aspects related to complying with relevant tax laws. PCG 2019/5 covers the Commissioner’s discretion to extend the two-year period to dispose of dwellings acquired from a deceased estate.
Section 118-195 disregards capital gains and capital losses made from certain CGT events that happen in relation to a dwelling that was a deceased person’s main residence and not being used to produce assessable income just before they died, or was acquired by the deceased before 20 September 1985.
If you dispose of an ownership interest in a dwelling passed to you as an individual beneficiary or as the trustee of the deceased’s estate within two years of the deceased’s death, any capital gain or loss you make on the disposal is disregarded. The Commissioner has the discretion to extend the two-year period.
Generally, the Commissioner will allow a longer period 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.
This Guideline outlines a safe harbour compliance approach and outlines the factors the Commissioner considers when deciding whether to exercise the discretion to extend the two-year period.
You may be entitled to a partial exemption for any capital gain or loss made from the disposal of your ownership interest in a dwelling if section 118-195 does not apply. This Guideline applies equally in relation to the Commissioner’s discretion to extend the two-year period for partial exemptions.
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