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Edited version of private advice
Authorisation Number: 1052032468743
Date of advice: 30 September 2022
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 to extend the two-year period to dispose of the dwelling?
Answer
Yes. Having considered your circumstances and the relevant factors set out in the Practical Compliance Guideline PCG 2019/5, the Commissioner will exercise the discretion to extend the two-year period to dispose of the dwelling. Further information about this discretion can be found by searching 'QC 66057' on ato.gov.au
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away in the 20XX year.
Probate was granted around 3 months after the deceased passed.
The deceased owned a dwelling.
The deceased acquired the dwelling after 1985 and the dwelling was used as the deceased's main residence until the deceased passed.
The dwelling was not used to produce assessable income.
The two children of the deceased are joint executors and beneficiaries under the deceased's Will.
The child of the deceased moved into the dwelling to live with the parent while they were still alive. The parent allowed the move during the course of the marriage breakdown of the child.
The child continued to live in the dwelling until the settlement of their divorce.
The divorce was a difficult time for the child and thier mental health was severely impacted. Not only they were grieving over the loss of their parent, they were also going through a long and complicated divorce from their former spouse. It took longer than expected for the divorce court orders to be finalised.
During that time, the child was unable to fully attend to the deceased estate in their capacity as joint executor due to these unforeseen personal circumstances beyond their control causing the delay on the disposal of the dwelling.
The dwelling was placed on the market in June 20XX immediately after the settlement of the divorce. The dwelling was sold in July 20XX, with settlement taking place in August 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
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