Edited version of private advice

Authorisation Number: 1052328275143

Date of advice: 27 November 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 (ITAA 1997) to allow an extension of time for you to dispose of your ownership interest in the property and disregard the capital gain or capital loss you made on the disposal?

Answer 1

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 20XX

Relevant facts and circumstances

In 19XX, you and your spouse, XX XX (the deceased) bought a property located at XX XX XX (the property) as joint tenants.

The property became your family home.

The property size is less than 2 hectares.

Around XX 19XX, you and the deceased bought and moved into a property located in XX XX.

From early 20XX, your child, XX XX rented the XX property from you. Your child will continue renting the XX property until its sale settlement date.

In early 20XX, the deceased was diagnosed with cancer and after a lengthy battle and extensive treatments they passed away on XX XX 20XX. The deceased's 50% interest in the XX property passed to you as the surviving joint tenant.

At the time of deceased's death, the XX property was not their main residence and was being rented to your child.

You had been married for XX years and were devastated by the loss whereby you found it difficult to make decisions.

Around XX 20XX, and over the ensuing XX months, your parent also required increasing care support for their declining health. Your parent lived on their own in XX XX XX.

Initially, your parent could cope with living independently. However, their mobility declined rather quickly, and they required full time care.

You made frequent trips (XX trips in a 12-month period) between XX and XX to assist with your parent's care needs, arrange respite accommodation, and attend hospital and medical appointments.

On XX XX 20XX, your parent passed away, aged XX years. You were appointed joint executor with your sibling to their estate.

You suffered debilitating grief, whereby simple decision-making became harder, with occasional feelings of helplessness and overwhelm making it difficult to address procedural matters, including administering 2 deceased estates.

At the behest of your sibling, you prepared your parent's property for sale before attending to the sale of the XX property.

You spent significant time and effort clearing furniture and removing household goods and arranging for the sale of your parent's property.

On XX XX 20XX (within the 2-year period), you sold your parent's property as joint executor of their estate.

On XX XX 20XX, you (as sole owner) entered a contract to sell the XX property.

The XX property sale will settle by XX XX 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195

Income Tax Assessment Act 1997 section 118-197

Income Tax Assessment Act 1997 section 128-50

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