TAX ALERT - ATO'S Discretion to Extend the Two-Year Period to Dispose of Dwellings Acquired from a Deceased Estate

Lowe Lippmann Chartered Accountants

Introduction

As a general rule, the trustees and beneficiaries of a deceased estate are able to disregard any CGT implications from the sale of a deceased person's principal residence, provided the sale of that property settles within two years of the deceased's death.

However, given that unforeseen circumstances (such as complex estate administration or challenges to the estate) may make it difficult to finalise a sale within this two year period, the Commissioner of Taxation has a discretion to extend the period where trustees or beneficiaries meet the conditions to apply for a longer period to complete the sale of the property.

During august 2018, the ATO issued a draft Practical Compliance Guidelines (PCG) in relation to the ATO's discretion to extend the two year period to dispose of dwellings acquired from a deceased estate.

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