Edited version of private advice

Authorisation Number: 1052389602722

Date of advice: 03 June 2025

Ruling

Subject: Commissioners discretion - 2 year disposal

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 'QC 66057'.

This private ruling applies for the following period:

Year ending XX June 20XX.

The scheme commenced on:

XX July 20XX

Relevant facts and circumstances

The deceased's spouse purchased the Property in December 19XX.

100% ownership of the Property was in the deceased's spouse's name.

The deceased and the deceased's spouse resided in the Property as their main place of residence.

The deceased's spouse died in July 19XX and the Property passed to the deceased by transmission on X July 19XX.

The deceased remained in the Property until they were moved into an aged care home in January 19XX.

The deceased died in August 20XX.

For the period when the deceased was residing in the aged care home, to the date of their death, the Property remained vacant.

The Property was never used for the purpose of producing assessable income.

The deceased signed a Will in December 20XX.

The Will named the deceased's child ('child A') as Executor of their Will and a beneficiary of their Estate.

The Will stipulated that child A was to receive X% share of the Estate.

The Will further stipulated that the deceased's other children, child B and child C, were to receive the remaining X% share as tenants in common.

The deceased signed a Codicil in July 20XX outlining the reasons for leaving the larger portion of the Estate to child A.

Caveats

On X February 20XX, a Notice of Intended application for probate was filed by child A.

Child B subsequently filed 5 caveats preventing disposal of the Property and probate being granted.

In August 20XX, child A lodged an application in the Court, seeking an order that the informal testamentary document dated July 20XX be deemed a codicil.

In December 20XX, a cross claim was filed by child B disputing the informal testamentary document dated July 20XX.

In May 20XX, the Judge handed down Orders in the Court that probate be granted to child A.

The Judge also ordered that the informal testamentary document, dated July 20XX, be a codicil to the Will of the deceased.

Preparing the property for sale

In January 20XX, real estate agents were engaged and valuers were retained to prepare the property for sale.

Cleaning of the Property was conducted in February 20XX.

In March 20XX, contracts were exchanged.

The Property was sold and settled in July 20XX.

Probate was granted to child A in August 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195

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