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Edited version of private advice
Authorisation Number: 1052361144749
Date of advice: 12 February 2025
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 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 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 ending 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.
From XX 20XX to XX 20XX, the property was prepared for sale, including clearing all belongings, minor fixing, repainting and installing new carpet.
On XX 20XX, the property listed on the market for sale.
On XX 20XX, a contract of sale was signed with a subject to finance approval clause.
On XX 20XX, the contract of sale was terminated due to the buyer not obtaining finance approval.
Due to minimal interest on the property, the price had been reduced twice.
On XX 20XX, the second contract of sale was signed subject to building inspection.
On XX 20XX, the second contract was terminated as the building inspection identified major defects.
From XX 20XX to XX 20XX, the executor fixed the defects of the property.
On XX 20XX, the third contract of sale was signed with a reduced price and the settlement occurred about a month after.
Relevant legislative provisions
Income Tax Assessment Act subsection 118 -195 (1)
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