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Edited version of private advice
Authorisation Number: 1052391747589
Date of advice: 18 June 2025
Ruling
Subject: Deceased Estates - Commissioner's discretion
Question 1
Will the Commissioner exercise the discretion under section 118-195 of 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 by searching ato.gov.au for 'QC 66057'.
This ruling applies for the following period:
Year ended DD MM 20XX
The scheme commenced on:
DD MM 19XX
Relevant facts and circumstances
Person A and their sibling each inherited a 50% interest in a dwelling (the property) following the death of a family member pre-CGT.
On DD MM 19XX, Person A and Person B purchased the remaining 50% share of the property from Person A's sibling, acquiring it as tenants in common.
On DD MM 19XX, Person A passed away.
Under the terms of their will, Person A appointed a third party as the sole executor and trustee of their estate. The will directed that their 50% interest in the property be divided equally between you and Person C. It did not confer any right of occupancy or life tenancy to any individual.
The property was Person A and Person B's main residence before Person A passed away and was not used to produce assessable income at that time.
On DD MM 19XX, the executor obtained a Grant of Probate for Person A's estate.
On DD MM 19XX, the certificate of title issued stated:
Person B holds two undivided one-quarter shares (50%), Person C holds one undivided one-quarter share (25%), and you hold one undivided one-quarter share (25%), as tenants in common.
On DD MM 20XX, Person B passed away.
Prior to and at the time of their death, the property was Person B's main residence and was not used to generate assessable income.
At the date of death, Person B did not hold any other property interests.
Under their will, Person B appointed you as the sole executor and trustee of their estate. The will provided that Person B's 50% share in the property be divided equally between you and Person C. It did not grant any right of occupancy or life tenancy to any individual.
In MM 20XX, you began clearing out Person B's belongings from the property.
Between MM 20XX and MM 20XX, you cleaned the property and painted the exterior to prepare it for sale.
Between MM 20XX and MM 20XX, you carried out minor repairs to the property.
On DD MM 20XX, you obtained a Grant of Probate for Person B's estate.
On DD MM 20XX, you requested property sale appraisals from several real estate agents.
On DD MM 20XX, you engaged a XX to sell the property.
On DD MM 20XX, XX listed the property for sale.
On DD MM 20XX, you (as both executor for Person B's estate and in your personal capacity) and Person C entered a contract for the sale of the property.
On DD MM 20XX, the property sale settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
Income Tax Assessment Act 1997 subsection 128-15(3)
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