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Edited version of private advice
Authorisation Number: 1052120778498
Date of advice: 22 May 2023
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time to the two-year period to dispose of the ownership interest in the dwelling owned as trustee of the deceased estate and disregard the capital gain or capital loss made on the disposal?
Answer
Yes. Having considered your circumstances and the relevant factors the Commissioner will allow an extension of time. Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'
This private ruling applies for the following period:
30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased owned a dwelling which was the main residence of the deceased.
The dwelling has never been used to derive rental income and the land on which it is situated is less than 2ha in size.
The children of the deceased are the joint executors and beneficiaries of the estate and had joint responsibility for preparing the dwelling for sale.
An appraisal of the dwelling describes it as a 1940s timber dwelling.
Chronological listing of work undertaken and Issues effecting progress
It was extremely difficult to secure registered trades people for small and short-term work due to a building boom of new homes in the local area.
Termite inspections identified infestations and damage.
Delay in obtaining the services of a registered trades person to remediate damage to the building.
Worked on restoring and repairing the internal fabric of the house.
A family member required urgent medical treatment which delayed work on the property.
Had tree stumps with termite activity removed.
Pest Controller assessment discovered Termite damage to the house. Timber battens on house stumps removed, replaced and treated.
Personal injury Visited Doctor and was prescribed pain medication and was ordered to rest.
Medical diagnoses required extensive treatment.
Limited capacity to perform work on the property.
A family member required more medical treatment which delayed work on the property.
Had asbestos sheeting located and encased or removed from various internal parts of the house.
Still issues obtaining trade services.
Built a low long retaining wall between path and house to divert rainwater from the house to prevent water flow under the house causing further stump damage while waiting for trade services.
All asbestos sheet covered.
Family visits greatly assisted with work on the house in preparation for sale. Visits ceased due to major bushfires.
Family members were impacted by the fires. Members were directly involved in fire related management.
Work slowed on the house.
March 2020 COVID 19 restrictions commenced.
Covid 19 restrictions in the State greatly affected any capacity to complete essential maintenance work to restore the house to a safe and marketable condition for sale.
Securing the services of Trades People to work on specialized work projects at the house became more problematic than it had been prior the Covid restrictions. Most Trades main priority was meeting their contracts on new house building projects and emergencies.
Lack of supply of certain building materials during Covid 19 restrictions slowed maintenance work progress.
During that period the property deteriorated further and required re-works.
Repair water damaged pathway and restore rainwater drains.
Reconstruct security fence and gate.
Level land behind house to create a safe access pathway to house.
Water Drainage problems: Installation of storm water channel and grate and to avoid further water damage.
Builder removed termite damaged rafters and fascia and reinstalled new rafters and fascia.
House re-inspected for termites and cleared
Much of the outstanding maintenance work which was completed in had been delayed because it required the services of Trades People who were in great demand in the local area.
Removed damaged wall base boards and replaced.
Removed back door concrete entrance steps. Re-built new, code complying steps.
Replaced timber steps and concrete path to front porch (safe access to property).
Damaged flooring and joists in back entrance passage and alcove removed and replaced.
Instructed solicitor to prepare necessary documents for the sale of house.
Property Appraisal process
Selling Agent appointed
House on Market
Contract of Sale signed
Settlement occurred over five years after the date of death
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