Edited version of private advice

Authorisation Number: 1052236887184

Date of advice: 3 April 2024

Ruling

Subject: Commissioners discretion - two year disposal

Question

Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time to dispose of the ownership interest in the Property and disregard the capital gain made on the disposal?

Answer

Yes - Having considered the circumstances and relevant factors presented, the Commissioner will allow an extension. 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:

Year ending X June 20XX

The scheme commenced on:

X July 20XX

Relevant facts and circumstances

The deceased died in January 20XX.

The Property was acquired pre-CGT and was not used to produce assessable income.

The Property was jointly purchased by the deceased and their late partner.

The Property is situated on less than 2 hectares.

The deceased had XXX children, all of whom are beneficiaries of the deceased estate.

Two of the children are co-executors and beneficiaries of the deceased estate.

Probate was granted to the executors shortly after the death of the deceased.

Two of the children are beneficiaries of the deceased estate.

One child was hospitalised for an illness shortly after the death of the deceased and was in recovery for the remainder of that year.

A co-executor wanted to put the Property on the market in XXX 20XX, however the other co-executor refused this until their sibling had recovered.

Two of the children had Covid-19 and were recovering from this from XXX 20XX to mid-XXX 20XX.

All beneficiaries lived a distance away from the Property. At various times in 20XX, the beneficiaries were unable to travel outside a 5km radius as a result from the Covid-19 pandemic.

The Property had an extensive amount of personal belongings that had to be removed from the Property.

No improvements were made to the Property before listing it for sale.

When the beneficiaries were able to travel, they organised several council clean ups and removal and sale of furniture between XXX 20XX and XXX 20XX.

The Property was listed for sale in XXX 20XX with a real estate agent. The Property was not sold by the time the agreement with the agent came to an end.

The Property was then re-listed with a new real estate agent. It was later found that this agent had never listed the Property for sale and their agreement with this agent was subsequently terminated.

A third real estate agent was engaged and the Property was listed for sale.

At this point, one co-executor refused to act in their capacity as co-executor and would not take any calls or respond to emails regarding the sale of the Property.

The remaining beneficiaries made the decision to progress the sale of the Property without the involvement of this co-executor.

The sale of the Property occurred in XXX 20XX, with settlement occurring in XXX 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).