Edited version of private advice

Authorisation Number: 1052255052074

Date of advice: 6 June 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 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 DD/MM/20YY

The scheme commenced on:

DD/MM/20YY

Relevant facts and circumstances

The Deceased passed away on XX/XX/20XX leaving a will.

As at date of death the deceased owned a dwelling at XXX, which was their main residence, and was acquired by the deceased on DD/MM/19YY.

The will appointed you as the executor.

You were deeply affected by the treatment the deceased received in hospital.

On DD/MM/20YY, you allowed tenants to move into the property. You had not originally intended to lease the property, however you could not access the deceased's funds and you were not in a position to finance the upkeep and expenses of the property yourself at this time.

On DD/MM/20YY, you were granted probate.

On DD/MM/20YY, the property title was transferred into your name, as beneficiary.

On DD/MM/20YY, you were diagnosed with some medical issues, brought on due to the bereavement and trauma experienced during the passing of the deceased. You were referred to a specialist for treatment.

On DD/MM/20YY, your spouse's parent passed away.

You receive treatment for the heightened risk of an illness brought on by stress. Your spouse is having ongoing specialist appointments for an illness.

On DD/MM/20YY, you obtained a real estate appraisal, however you were stressed and felt under enormous pressure and not in a position to proceed at this time.

On DD/MM/20YY, a second lease on the property commenced for 12 months, with new tenants, a family with young children.

In MM/20YY, you and your spouse move to a more remote location due to the effect COVID-19 could pose to your spouse with their medical issues and history, and no available vaccines at this time.

On DD/MM/20YY, your spouse suffered an injury, which resulted in you having to care full time for them, for a period of several months.

On DD/MM/20YY, upon the completion of the lease, you were not comfortable in evicting a young family in the midst of the Covid-19 pandemic and extended the lease, allowing them to stay in the property.

On DD/MM/20YY, your spouse's remaining parent passed away.

In late 20YY, your spouse received a diagnosis of a terminal illness, which is followed by a period of ongoing medical treatment. You are their full-time carer at this time.

On DD/MM/20YY, the tenants moved out of the property and you allow your child to move in.

In MM/20YY, flooding in the local area caused damage to the property. These repairs needed to be approved by the Strata Management. The strata took quite some time to get the mediation works underway. This was due to the insurance claim being denied by the insurer. The owner's corporation agreed to lodge a dispute with the insurer and obtain legal advice. The work order for the remedial works to the property was issued by Strata Management on DD/MM/20YY, however the company who carry out the repair work for Strata Management did not commence work until you engaged with them. The work was not started until MM/20YY and it was completed in early 20YY.

On DD/MM/20YY, the property is listed for sale.

On DD/MM/20YY, a contract of sale is signed with settlement occurring on DD/MM/20YY.

The property is less than 2 hectares.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195

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