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Edited version of private advice
Authorisation Number: 1052349089823
Date of advice: 30 January 2025
Ruling
Subject: Commissioner's discretion - deceased estates
Question 1
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 1
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 ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
Person A (the deceased) and Person B purchased a dwelling many years ago.
The dwelling is located at Location A (the property).
The property is less than X hectares in size.
On the death of Person B in 19XXX, the deceased acquired Person B's ownership interest in the property.
The deceased died some time ago.
The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time.
The deceased appointed Person C and Person D as trustees in their will.
Probate of the will was granted to Person C and Person D.
Person D died without having resigned as trustee of the estate or appointing any other trustee in their place.
The deceased's will granted a life tenancy to Person C.
Person C resided at the property from the year they were born until they entered care.
The month after Person C entered care, Person C and Person D and Person E signed a deed appointing Person D and Person E as trustees. The deed also stated that Person C was resigning as trustee.
As soon as Person C vacated the property to enter care, you commenced preparations to put the property on the market.
You signed a contract for the sale of the property a few months later.
Person C died several days after the contract was signed.
Settlement occurred several months later.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
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