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Edited version of private advice
Authorisation Number: 1052241782874
Date of advice: 15 April 2024
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 XXXX 20YY
The scheme commenced on:
XX XXXX 20YY
Relevant facts and circumstances
The deceased acquired the dwelling on XX XXXX 20YY.
The property was situated on less than two hectares of land.
The property was not used to produce income.
Prior to the deceased's passing they occupied the property as their principal place of residence.
The deceased signed their last Will on XX XXXX 20YY.
The deceased passed away on XX XXXX 20YY.
The Will named Person 1 and Person 2 as executors of the estate.
An application for probate was delayed as Person 2 believed a conflict of interest existed as their legal representation also acted for Person 1.
Person 2 acquired new legal representation and sought a grant of probate in XXXX 20YY.
Probate was delayed as the solicitor possessing the Original Will refused to provide it to the executor under a solicitor's lien.
The executor proceeded with an application to the Supreme Court of the State for probate without the original will in XXXX 20YY.
On XX XXXX 20YY, the executor received a requisition from the Supreme Court of the State detailing that probate would not be considered until the Original Will was supplied.
On XX XXXX 20YY, a caveat was lodged by Person 3 and Person 4 as they are children of the deceased and were not listed as beneficiaries under the Will of the deceased.
On XX XXXX 20YY, a second caveat was lodged by Person 3 and Person 4 contesting the validity of the Will and alleging the deceased lacked the requisite testamentary capacity at the time of executing their last Will.
On XX XXXX 20YY, the Supreme Court of the State notified the executor of the latest caveat through a further requisition.
On XX XXXX 20YY, the executor received the Original Will after Person 1 settled the dispute and paid outstanding costs owed to the solicitor for the preparation of the Will.
On XX XXXX 20YY, the caveats were withdrawn by Person 3 and Person 4 after extensive negotiations between them and the executors.
On XX XXXX 20YY, the executors jointly recommenced an application for probate.
On xx XXXX 20YY, probate was granted to the executors.
Further delays before sale are attributed to professional cleaning, repairs to the property and disposing of the deceased's possessions.
On XX XXXX 20YY, the property was sold, and settlement was completed.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195(1)
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