Edited version of private advice

Authorisation Number: 1052384227550

Date of advice: 11 April 2025

Ruling

Subject: CGT - 2-year discretion

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 be searching ato.gov.au for 'QC 66057'

This ruling applies for the following periods:

Year ended 30 June 20XX

The scheme commenced on:

XX XXXXX 20XX

Relevant facts and circumstances

XX XXXXX 19XX the deceased and spouse purchased The Property as joint owners.

XX XXXXX 19XX, the spouse passed away. From this time the property was solely in the deceased's name.

XX XXXXX 19XX, the deceased, created a Will, which divided the estate equally among the three children - Child A, Child B and Child C. Child A is listed as the Executor of the Estate in the Will.

XX XXXXX 20XX, the deceased passed away.

XX XXXXX 20XX, the Grant of Probate was obtained.

The Property was never rented or used to produce assessable income prior to being sold.

The Property is less than two hectares.

Child C lived with the deceased, moving into the house with them in 19XX, and remained in the house after the spouse passed away.

The deceased needed to live with Child C to care for them.

When the deceased passed away, the Will provided that the property be divided equally between Child A, Child B and Child C.

Child A and Child B both made attempts to convince Child C to move out of the Property, with the intention to sell, however, Child C refused to leave.

Child A and Child B were concerned about Child C's mental health issues if they were forced to leave the Property.

The Property was unable to be sold whilst Child C was alive as they were unable to be removed from the property, due to their fragile medical issues. They have suffered from these issues since childhood up until their passing.

A copy of the medical report has been included as part of the application.

XX XXXXX 20XX, Child C passed away.

XXXXX 20XX - XXXXX 20XX,

•                The property was cleaned and made ready for sale. Carpets, items and all rubbish had to be removed, all paperwork had to be reviewed as Child C did not keep any computer records, tax returns had to be finalised.

•                The Property was transferred into Child A's name as the executor of the deceased's estate.

•                Child A had previously suffered from a medical issue and needed to undergo a procedure to monitor their recovery.

•                Child A underwent an operation and required bedrest and recovery time.

•                Child A's spouse has health issues, Child A cares for them.

•                Child B underwent XXX operations which required bedrest and recovery time.

XXXXX 20XX, the Property was marketed for sale.

XX XXXXX 20XX, a contract of sale was signed.

XX XXXXX 20XX, settlement of property occurred.

Relevant legislative provisions

Income Tax Assessment Act 1997 - section 118-195

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