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Edited version of private advice
Authorisation Number: 1052127711159
Date of advice: 13 June 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 for you to dispose of your ownership interest in the dwelling and disregard the capital gain or capital loss you 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 ruling applies for the following period:
Year ended XX/XX/20XX
The scheme commenced on:
XX/XX/20XX
Relevant facts and circumstances
The Deceased passed away on XX/XX/20XXleaving a will (the Will).
As at date of death, the Deceased owned the Property. The Property was the main residence of the Deceased and had been acquired on after 10 September 1985.
The Will granted a life tenancy over the Property to the Life Tenant.
On XX/XX/20XX, probate of the Will was granted to the Executors.
On XX/XX/20XX, the Life Tenant passed away.
After the Life Tenant's passing, the Executors attended to clearing the possessions left by the Life Tenant and the Deceased, and general maintenance on the Property. The Property had been neglected and the Executors were required to source various tradespersons to bring the Property to a saleable state. These efforts were hampered by difficulties in obtain tradespersons during COVID-19. No major repairs were necessary to the Property.
On XX/XX/20XX, the Executors engaged a real estate agent to market the Property, and on XX/XX/20XX the Property was listed for sale with a price guide of $XX, as per the recommendation of their real estate agent.
After receiving no offers, the Executors reduced the asking price to $XX. The Property still had minimal interest and therefore in an effort to sell the Property as quickly as possible, the Executors listed it for auction.
On XX/XX/20XX, the Property was sold by contract with settlement occurring on XX/XX/20XX.
At all material times, the Property was not used for producing assessable income.
The Property is less than 2 hectares in size.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
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