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Edited version of private advice
Authorisation Number: 1052351045204
Date of advice: 15 January 2025
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.
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 'QC66057'.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on:
XX 20XX
Relevant facts and circumstances
The deceased passed away on XX 20XX.
The property was situated on less than 2 hectares of land.
The deceased acquired the property after 20 September 1985.
The property was the main residence of the deceased until the date of death and was not used to produce assessable income at any time.
In 20XX, the deceased moved into aged care centre. The deceased chose to continue to treat the property as their main residence.
Shortly before the deceased passed away, rectification works had been organised to fix the damage at the property caused by a water leak. Insurance monies were received in relation to the damage.
The work was left incomplete until the executor was granted probate.
Following the deceased's death, the Will was challenged by a beneficiary.
Negotiations took place between the solicitors of the beneficiaries until an agreement was reached.
The executor entered into a contract of sale of the property shortly after the rectification works finished and settlement occurred a few weeks later.
During the period the deceased was in aged care and following their death, the property remained vacant until its sale.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-195(1)
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