Edited version of private advice

Authorisation Number: 1052309054466

Date of advice: 30 September 2024

Ruling

Subject: Commissioner's discretion - deceased estate

Question

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 acquired from a deceased estate 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 and 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 ending 30 June 20XX

The scheme commenced on:

XX XX 19XX

Relevant facts and circumstances

On XX XX 19XX XX XX the deceased passed away.

At date of passing, the deceased owned a property at XX XX, XX XX (the property).

The property was purchased pre-1985. The exact date is unknown but was purchased before XX 19XX.

The property is less than 2 hectares in size.

The deceased was the sole owner of the property when they died, and at that time it was their main residence and not being used to produce income.

On XX XX 19XX probate was granted to the deceased four children, person A, person B, person C and person D as executors of the estate.

A copy of probate and the will was supplied with the application.

The deceased's will, was dated XX XX 19XX.

Within the will, the deceased provided a statement that expressed a life interest for person A and person B.

As such the siblings agreed to a deed of family arrangement that provided a life interest for person A and B.

On XX XX 19XX a deed of family arrangement was entered into between the siblings whereby a right of occupation was granted to both person A and person B during their lifetimes.

A copy of the deed of family arrangement has been supplied in the application.

As a result of the deed of family arrangement, the title to the property at XX XX was transferred in equal shares as tenants in common to the siblings.

On XX XX 20XX Person A passed away.

A copy of person A's will dated XX XX 20XX was supplied in the application.

On XX XX 20XX probate was granted to person B as executor of the estate.

A copy of probate has been supplied in the application.

Person A's share of 25% in the property was transferred to person B and therefore the title was held as 50% to person B, 25% to person C and 25% to person D.

On XX XX 20XX person B passed away.

A copy of person B's will dated XX XX 20XX was supplied in the application.

On XX XX 20XX probate was granted to a family member of person B, Person E as executor of the estate.

Timing of the property sale

Person B's probate took 4 months to obtain.

After probate was received person E, person C and person D took some time to clean out the property, do some minor repairs and get the property ready for sale.

The property took over 6 months to sell as it was a unique property.

The property was sold by person C, person D and person E.

On XX XX 20XX a contract for property was entered and settlement occurred on XX XX 20XX.

The estate has been fully administered.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195

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