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Edited version of private advice
Authorisation Number: 1052402220806
Date of advice: 12 June 2025
Ruling
Subject: Commissioner's discretion - deceased estate
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. The circumstances were complex involving X properties, overseas assets and overseas inheritance tax obligations. 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/20YY
The scheme commenced on:
DD/MM/20YY
Relevant facts and circumstances
On DD/MM/20YY, the deceased passed away.
The deceased passed intestate, and the estate has been administered in accordance with the rules of intestacy in the relevant state.
The beneficiaries of the Will were Person A and Person B.
At date of death, the deceased owned a property at XXX, which they acquired in 20YY.
This was the deceased's main residence at time of death and has not been used to produce income.
The property is less than 2 hectares.
On DD/MM/20YY, Person C was granted letters of administration on intestacy by the Supreme Court of XXX.
The deceased died with assets in both Australia and overseas.
The assets in Australia included two properties and several vehicles.
The second property was situated at XXX.
The overseas assets were a bank account (held with Bank A) and an insurance policy (with Company A).
On DD/MM/20YY, Lawyer A, representing the administrator and deceased estate, wrote to Bank A and Company A confirming assets held by the deceased.
On DD/MM/20YY, Bank A wrote to Lawyer A confirming the account balance.
On DD/MM/20YY, the second property was valued for the purposes of assisting in calculating each of the beneficiary's entitlements.
On DD/MM/20YY, Lawyer A received a letter from Company A confirming proceeds and requirements to release funds, which included an overseas country reseal of Australian letters of administration.
On DD/MM/20YY, Person B moved into the property and considered it their principal place of residence and wished to take over the property from the estate.
On DD/MM/20YY, Lawyer A contacted Lawyer B, a law firm in the overseas country, requesting assistance with the overseas reseal of letters of administration.
On DD/MM/20YY, Lawyer A forwarded the required forms to Bank A to enable the release of funds.
On DD/MM/20YY, Lawyer B advise acceptance of retainer and request additional information with regard to overseas inheritance, assets and reseal.
Over the next several months, email correspondence between Lawyer A and Lawyer B was conducted in order to complete necessary documentation.
On DD/MM/20YY, the funds were received from Bank A for the deceased's bank account.
On DD/MM/20YY, Lawyer B confirm inheritance tax forms have been drafted for review and they will forward them shortly, subject to asset search results. They advised there was a delay in the asset search due to change in provider
On DD/MM?20YY, the property was valued at $XXX by XXX.
The estate transferred the property to Person B which consisted of their residual entitlement from the estate, and Person B buying the balance of the property for $XXX.
On DD/MM/20YY, a Deed of Family Arrangement is executed between Person A and Person B outlining how the assets are to be divided between the two beneficiaries.
On DD/MM/20YY, Lawyer B confirm the asset search was now complete and provided results to Lawyer A.
On DD/MM/20YY, the change of title is registered with titles Queensland.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
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