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Edited version of private advice
Authorisation Number: 1052288242053
Date of advice: 19 September 2024
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
Will the Commissioner exercise the discretion under section 118-195 of 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 1
Yes.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
Spouse A and Spouse B acquired the property pre-CGT as joint tenants.
The property is on land less than X hectares.
The property was never used to produce assessable income.
Spouse A and Spouse B divorced.
The property changed from joint tenancy to tenants in common with 50% ownership interests each assigned to Spouse A and Spouse B.
Spouse A passed away with no Will and no action was taken with respect to their estate at that time.
All concerned parties were under the belief that Spouse A and Spouse B held the property jointly and that Spouse A's interest would pass to Spouse B under survivorship rules.
Spouse B continued to reside at the property as their principal place of residence.
Spouse B then passed away.
From a time until the property was sold, Child A, a beneficiary of Spouse A's estate, used the property as their principal place of residence.
When Spouse B passed away, it was brought to notice that under intestacy rules, Spouse A's 50% interest in the property as tenant in common should have passed in equal shares to their surviving children on Spouse A's date of death.
Child A was granted probate for Spouse B's estate.
Child A was notified of a claim to Spouse B's estate by his sibling.
Child A was granted letters of administration for Spouse A's estate.
Child A's sibling withdrew their claim.
Child A signed a contract to sell the property on behalf of Spouse A's and Spouse B's estates, and the property settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
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