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Edited version of private advice
Authorisation Number: 1052246092346
Date of advice: 29 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 ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on DD MM 20YY.
The dwelling is located at XXXX (the property).
The deceased acquired the property after 20 September 1985.
The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time. The property was situated on less than two hectares of land.
Probate was granted within 12 months of the deceased dying.
From the date the deceased passed away until the property was sold, the property was occupied by a child of the deceased (Person A). They did not have a life right to occupy the property under the will of the deceased. They were living with the deceased in the property and acting as their carer.
The will of the deceased appointed Person A as an executor of their estate, alongside the other children of the deceased. The will stated that any property shall be divided equally amongst the executors as beneficiaries.
Person A was diagnosed with a progressive disorder shortly before the deceased passed away. Person A elected not to inform the deceased of this diagnosis, as they felt informing them of this could severely impact their already declining health.
It was the decision of the executors that it would be beneficial for Person A to continue living in the property due to their illness as the illness had begun progressing quickly and they needed to be within walking distance of their doctor (who had been their doctor for a significant amount of time), as well as having an established relationship with neighbours and friends to provide assistance as required. Immediate family members also lived close by.
The local community became aware of their condition and could also provide aid where able. The property had already had alterations made to aid with their condition.
Person A also lacked financial stability to move elsewhere within the area due to personal circumstances.
The property was sold when the condition had progressed to a point where Person A could no longer remain wholly independent and required constant case.
The property was sold on DD MM 20YY, with settlement occurring on DD MM 20YY.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
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