| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1052405207256
Date of advice: 5 June 2025
Ruling
Subject: Commissioner's discretion - deceased estates
Question
Will the Commissioner exercise the discretion under section 118-195 of 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
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 30 June 20XX
The scheme commenced on:
XX XXXX 20XX
Relevant facts and circumstances
After 20 September 1985, the Deceased married Person A.
The Deceased and Person A had 4 children:
• Person B
• Person C
• Person D
• Person E
After 20 September 1985, the Deceased and Person A as tenants in common purchased the dwelling located at the property.
In or around July 19XX, the Deceased and Person A separated but never legally divorced.
On XX XXXX 19XX, the Deceased and Person A signed and filed Consent Orders to the Family Court of Australia for the settlement of their jointly owned property.
On XX XXXX 19XX, in accordance with the Family Court orders, the property was transferred to the Deceased's sole name.
After separation, Deceased had another child Person F.
In 20XX, the Deceased sibling Person G moved into the property.
Person G did not pay any money to stay at the property.
Person G suffers from ongoing health issues and disabilities because of XXXX.
On XX XXXX 20XX, the Deceased passed.
The Deceased for the period of their ownership did not treat any other property as their main residence.
The Deceased never had a formal Will and passed intestate.
Person B as the proposed administer of the estate, hired Firm A to act as the solicitors.
On XX XXXX 20XX, Person B instructed Firm A that Person A and Person C intended to disclaim their interests in the estate.
In or around XX XXXX 20XX, conversations stated with Person G and the family that they intend to sell property once the Grant of Letters of Administration were obtained.
On XX XXXX 20XX, Firm A started searching for any Wills of the Deceased.
On XX XXXX 20XX, Firm A contacted assets holders to ascertain details of estate for application for letters of administration.
On XX XXXX 20XX, Firm A commenced work on documents for application of letters of administration.
On XX XXXX 20XX, Firm A prepared consents to administration for beneficiaries to complete.
On XX XXXX 20XX, Firm A prepared disclaimer document for Person A to complete.
On XX XXXX 20XX, Firm A complete draft court documents and sent to Person B for approval.
On XX XXXX 20XX, Firm A wrote to Person A with respect to disclaimer documents.
On XX XXXX 20XX, Firm A received email from Person C regarding their interest in the estate and consent to administration document. Instructions to Person C to complete consent to administration at Australian embassy in Country A.
On XX XXXX 20XX, Firm A amended Person A's consent to administration documents.
On XX XXXX 20XX, Firm A receive consents to administration signed by Person D, Person E and Person F.
On XX XXXX 20XX, Firm A received Person A comments to affidavit disclaiming their interest in estate. The affidavit was amended.
On XX XXXX 20XX, Firm A wrote to Person A to request a copy of marriage certificate for application for letters of administration.
On XX XXXX 20XX, Firm A amended consents to administration and provide further instructions to beneficiaries to correctly complete these documents.
On XX XXXX 20XX, Firm A sent amended consents to administration to beneficiaries to complete.
On XX XXXX 20XX, Person B informed Firm A that they were considering withdrawing from their role as the administrator of the estate.
On XX XXXX 20XX, Firm A received correspondence from Person C advising they intend to retain their entitlement to the estate.
On XX XXXX 20XX, Firm A receive correspondence from Person B confirming they intended to withdraw from the role as administrator due to their own health issues.
On XX XXXX 20XX, Person B formally terminated retainer with Firm A.
On XX XXXX 20XX, Person F commenced acting as the administrator of the estate.
On XX XXXX 20XX, Firm A prepared amended consents to administration for beneficiaries to complete providing consent to Person F to act as administrator.
On XX XXXX 20XX, Firm A amended court documents to change proposed administrator of estate to Person F.
On XX XXXX 20XX, Firm A wrote to Person A with respect to affidavit disclaiming interest in estate.
On XX XXXX 20XX, Firm A wrote to beneficiaries with amended consents to administration to complete.
On XX XXXX 20XX, Firm A receive correspondence from Person A amending instructions and advising they no longer intend to claim their "equal share of the estate".
On XX XXXX 20XX, Firm A wrote to another solicitor to obtain copies of Family Law Court Orders.
On XX XXXX 20XX, Firm A received correspondence from Person A confirming they did not legally divorce and advising they intend to claim "equal with kids or less" from the estate.
On XX XXXX 20XX, Firm A wrote to Family Law Court to obtain copies of Orders.
On XX XXXX 20XX, Firm A sent correspondence to Person A to obtain copy of Family Law Court Orders.
On XX XXXX 20XX, Firm A sent follow up correspondence to Person A.
On XX XXXX 20XX, Firm A received correspondence from Person A, advising them to seek independent legal advice.
On XX XXXX 20XX, Firm A wrote to Person F with advice with respect to Person A's interest in estate.
On XX XXXX 20XX, Firm A receive correspondence from Firm B on behalf of Person A.
On XX XXXX 20XX, Firm A wrote to Person F to obtain instructions with respect to letter from Firm B.
On XX XXXX 20XX, Firm A sent correspondence to Firm B with offer of Deed of Family Arrangement (DFA).
On XX XXXX 20XX, Firm A receive correspondence from Firm B accepting offer to enter DFA.
On XX XXXX 20XX, Firm A wrote to Person F to obtain instructions for DFA.
On XX XXXX 20XX, Firm A obtained Person F's instructions to prepare DFA.
On XX XXXX 20XX, Firm A commenced work on drafting DFA.
On XX XXXX 20XX, Firm A sent draft DFA to Firm B for approval.
On XX XXXX 20XX, the DFA was finalised.
On XX XXXX 20XX, the DFA was sent to the beneficiaries to be executed in counterpart and returned by Post.
On XX XXXX 20XX, Firm A commenced work on application for letters of administration filed with the Online Registry of the Supreme Court of State A.
On XX XXXX 20XX, Firm A continued work on application for letters of administration with the Online Registry of the Supreme Court of State A.
On XX XXXX 20XX, the DFA was signed by the final party.
On XX XXXX 20XX, Firm A sent correspondence to Firm B disclaimer of interest in estate to be signed by Person A.
On XX XXXX 20XX, the final DFA was received in the post from Person C in Country A.
On XX XXXX 20XX, Firm A continue work on application for letters of administration and prepare affidavits in support of Person F, application sent to client for instructions.
On XX XXXX 20XX, the DFA was compiled and circulated amongst beneficiaries.
On XX XXXX 20XX, the amended draft application for letters of administration with client instructions.
On XX XXXX 20XX, Firm A met with Person F to sign Court Documents for application for letters of administration.
On XX XXXX 20XX, the application for letters of administration were filed with the Online Registry of the Supreme Court of State A.
On XX XXXX 20XX, the Supreme Court of State A requested further documentation in the form of a requisition to application for Letters of Administration.
On XX XXXX 20XX, Firm A sent requisition to Person F and commenced work on affidavit in response to requisition.
On XX XXXX 20XX, Firm A sent correspondence to Firm B with respect to affidavit of Person A in response to requisition.
On XX XXXX 20XX, Firm A sent draft court document in response to requestion to Person F for approval.
On XX XXXX 20XX, Firm A finalised court documents in response to requisition and send affidavits to Firm B.
On XX XXXX 20XX, Firm A met with Person F to depose affidavit in support of requisition and file response to requisition with Supreme Court of State A.
On XX XXXX 20XX, the Supreme Court of State A issued Grant of Letters of Administration. Firm A provided Person F advice for the administration of estate. Work commenced on preparing property for sale. Around this time, Person G was verbally informed he would be required to vacate the property for sale. Person F attends the property for a few hours each afternoon to clean same in anticipation on sale.
On XX XXXX 20XX, Firm A provides instructions to Person F for transmission and sale of the property.
On XX XXXX 20XX, Firm A received instructions from Person F to write to Person G as they were having difficulty finding alternative accommodation.
On XX XXXX 20XX, Firm A sent correspondence to Person G requesting that they vacates the property.
On XX XXXX 20XX, Person G vacated the property. Person B and Person E travelled to assist Person F to finish cleaning property.
On XX XXXX 20XX, Firm A received correspondence from Person F confirming the property was ready for sale and they have engaged an agent, and the property is on the market.
On XX XXXX 20XX, Firm A sent the first contact for sale to buyer's agent.
On XX XXXX 20XX, exchanged of contract for sale occurred.
On XX XXXX 20XX, original buyer rescinds contract during their cooling off period.
On XX XXXX 20XX, entered second contract for sale.
On XX XXXX 20XX, the property settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 section118-195
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).
