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Edited version of private advice
Authorisation Number: 1052252562946
Date of advice: 27 May 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 (ITAA 1997) to allow an extension of time for you to dispose of your ownership interest in the property 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 DD/MM/20YY.
The scheme commenced on:
DD/MM/20YY
Relevant facts and circumstances
The deceased passed away on DD/MM/20YY, leaving a will.
As at date of death, the deceased owned a property at XXX which they acquired on DD/MM/19YY.
The will appointed Person A and Person B as executors.
In MM/20YY, Person A's parent was moved from hospital to a rehabilitation centre. Person A was focusing on their parent's health whilst dealing with the symptoms of their own degrading mental health which was placing a huge strain on their wellbeing. Person A's parent was discharged from hospital and remained at the property for a short time before being admitted to hospital again at the end of MM/20YY, when it was determined that they were no longer capable to live independently and take care of themselves. They would need to be placed in a Nursing Home for adequate care.
During early MM/20YY, Person A was preparing the property for sale. Whilst attending to some maintenance on the property, they suffered an accident which was severe in nature, sustaining multiple fractures and injuries which resulted in several months of recovery and rehabilitation. This again adversely impacted on their mental health greatly.
In MM/20YY, Person A's doctor recommended they take time off work due to declining mental health and difficulties at work.
On DD/MM/20YY, Person A's parent passed away, along with the loss of a few other family members in the months after. Person A was then involved in a motor vehicle accident which left them with injuries requiring surgery and several months in rehabilitation. Following their recovery, they returned to work again in MM/20YY.In MM/20YY, a probate application was lodged, which was initially rejected due to the deceased's multiple names.
On DD/MM/20YY, probate granted to Person A.
In MM/20YY, Person A engaged the services of a real-estate agent, however due to ongoing personal issues, and a period of treatment and therapy was unable to proceed with the sale at this time.
A contact of sale was signed at auction in MM/20YY, and settlement occurred on DD/MM/20YY.
No major renovations or improvements were made to the property from the time deceased passed away until the sale was finalised.
The property is less than 2 hectares in size.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
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