Edited version of private advice

Authorisation Number: 1052276029222

Date of advice: 16 July 2024

Ruling

Subject: Commissioner 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 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The deceased passed away between XX/XX/20XX and XX/XX/20XX, according to the death certificate.

The deceased passed away intestate.

The deceased owned a property (the property) that was acquired 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 the time of death.

The property was situated on less than two hectares of land.

In XX/20XX and XX/20XX, the deceased's child (Person A) spent time searching through the property in attempts to locate a will.

From XX/20XX to XX/20XX, Person A made enquiries with various law firms to confirm if they held a copy of the deceased's will.

On XX/XX/20XX, Person A engaged with Organisation A to commence the process of applying for Letters of Administration.

On XX/XX/20XX, Organisation A submitted the request for Letters of Administration to be granted.

On XX/XX/20XX, the Supreme Court of State A requested confirmation that the deceased was not in a de facto relationship prior to their death.

Between XX/20XX and XX/20XX, Person A contacted the deceased's friend and support career from Organisation B to obtain Affidavits to confirm that the deceased was not in a de facto relationship at the date of death.

In XX/20XX and XX/20XX, Person A made several attempts to contact Organisation B, however, was unsuccessful. Organisation B were unable to provide any information, as Person A did not have legal grounds to obtain this information as Probate or Letters of Administration had not been granted.

In XX/20XX, Organisation A resigned as the legal representative as they did not have the expertise to assist with the complexity of the case.

On XX/XX/20XX, Person A engaged with Organisation C to assist with the application for the grant of Letters of Administration.

In XX/20XX, Organisation C commenced the process of requesting the relevant documentation.

On XX/XX/20XX, a letter from Organisation C was sent to Organisation B requesting records of the deceased's living arrangements and de facto relationship status in the period within the last X years before their death.

On XX/XX/20XX, documents were provided to Organisation C from Organisation B which indicated that the deceased lived alone, they were suffering from health issues and required carers to assist with regular shopping and attending medical appointments.

On XX/XX/20XX, Organisation C advised Person A to contact the neighbour to ask if they could provide an Affidavit about their observation of the deceased's living arrangements and if a de facto relationship existed.

On XX/XX/20XX, Person A met with the neighbour, who confirmed that in 20XX, they did see a regular visitor, however there were no regular visitors between 20XX and 20XX. The neighbour was unable to provide an Affidavit.

In XX/20XX, Organisation C commenced drafting an Affidavit. They decided to file the application for Letters of Administration based on evidence received from Organisation B and the Affidavit.

On XX/XX/20XX, an Affidavit was provided by a legal representative of the Lawyers to obtain Letters of Administration.

On XX/XX/20XX, Letters of Administration were granted to Person A.

On XX/XX/20XX, Person A engaged a cleaning business to prepare the property for sale. Some repairs and maintenance were undertaken on the property, which included fixing a collapsed roof in the garage, repairing the balcony, and the removal of a wasp nest.

On XX/XX/20XX, Person A engaged with a real estate agent to sell the property.

The property remained vacant until it was sold.

A contract was entered into to sell the property on XX/XX/20XX with settlement occurring on XX/XX/20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 118-195(1)

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).