Edited version of private advice

Authorisation Number: 1052289393115

Date of advice: 09 August 2024

Ruling

Subject: Commissioner's discretion - deceased estates

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 to dispose of the ownership interest in the Property and disregard the capital gain 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 several years ago.

The deceased lived at the property.

The property was the deceased's main residence just before they passed away.

The property was less than 2 hectares in size.

The property was never used to produce assessable income prior to the deceased's death or after their death.

The reason for the delay in selling the property within the legislated 2-year time period is due to complexity in administering the estate.

The timeline of events are as follows:

The Grant of Probate was granted to Public Trustee as executor as per the will.

An Inheritance Family Proceedings claim was filed. This was resolved by agreement with the court.

Orders were made for provision to be made out of the estate.

Orders were then endorsed on the Grant of Probate.

The property was instructed to be cleared for sale.

While clearing the property for sale a subsequent will was found, naming another party as executor.

The Public Trustee advised the court of the subsequent will and requested that the Grant of Probate to be revoked.

The court sought the subsequent will for inspection.

The court had concerns about the execution of the subsequent will and required evidence from attesting witnesses. The witnesses were required to provide "Affidavits of Due Execution".

It took months to locate the concerned witnesses and acquire the affidavits.

The Grant of Probate granted was revoked by the court.

The other named in the subsequent will did not want to administer the estate and the beneficiaries asked the Public Trustee to administer the estate on the subsequent will.

This required that an application for an order to administer the estate on the subsequent will be lodged.

The parties, through their legal representatives sought to apply for the order themselves but after finding difficulties with their application, requested that the Public Trustee to apply for the order.

An application was made to the court for the Public Trustee to administer the estate pursuant to the request of the named executor and the beneficiaries.

The court ordered that Letters of Administration on the subsequent will be granted to the Public Trustee.

The court issued a grant of Letters of administration on the subsequent will to the Public Trustee.

A valuation and appraisal was carried out on the property. An agent retained to market the property.

The property was sold at auction and settled.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195

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