Edited version of private advice

Authorisation Number: 1052366113919

Date of advice: 26 February 2025

Ruling

Subject: Commissioner's discretion - deceased estate

Question

Will the Commissioner exercise their discretion under subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the time limit under subsection 152-80(1)(d) of the ITAA 1997 to a specified date to dispose of the property?

Answer

Yes.

The Commissioner has considered the following factors in determining whether to exercise the discretion to extend the time limit set out in paragraph 152-80(1)(d) of the ITAA 1997:

•                     whether there is evidence of an acceptable explanation for the period of extension requested and whether it would be fair and equitable in the circumstances to grant the extension;

•                     whether it would be prejudicial to the Commissioner to grant further time. The absence of prejudice is not enough to justify the granting of the extension;

•                     whether the decision will unsettle people other than the Commissioner or unsettle established practices;

•                     whether it is fair to people in similar positions and the wider public interest;

•                     whether there is any mischief involved; and

•                     the consequences of granting the extension.

It was considered that you had intended to sell the property however, the presence of a long-term occupant residing in the property, refusing to vacant and the resulting lengthy legal disputes delayed the intended sale.

Having considered the circumstances and the relevant factors, the Commissioner will allow an extension of time as there is evidence of an acceptable explanation for the period of extension requested, and it would be fair and equitable in the circumstances to provide the extension.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

DD MM 20YY

Relevant facts and circumstances

The deceased passed away on DD MM 20YY.

The property is located at XXXX (the property).

The property was acquired by the deceased before 20 September 1985.

The property was not the main residence of the deceased at the time they passed away. The property was occupied by an acquaintance of the deceased (Person A), who had resided in the property rent free for a significant amount of time.

Probate was granted on DD MM 20YY.

On DD MM 20YY, the solicitor for the estate issued correspondence to Person A advising probate had been granted and requested they vacate the property to allow it to be sold.

On DD MM 20YY Caveat was lodged by the estate.

On DD MM 20YY the estate issued letter to Person A advising they had failed to deliver vacant possession and further requested immediate vacant possession.

On DD MM 20YY Supreme Court directions hearing was held. The court allowed defendant a further period to file an amended defence by DD MM 20YY.

On DD MM 20YY the estate was advised the matters were further delayed.

On DD MM 20YY a Consent Deed was signed by both solicitors and lodged online via Supreme Court portal.

On DD MM 20YY Person A vacated the property.

On DD MM 20YY a real estate agent was retained.

On DD MM 20YY the property was sold at auction, with settlement occurring on DD MM 20YY.

The property has not been used to produce assessable income between the date the deceased passed away and the date the property was sold.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 152-80

Income Tax Assessment Act 1997 paragraph 152-80(1)(d)

Income Tax Assessment Act 1997 subsection 152-80(3)

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).