Edited version of private advice

Authorisation Number: 1052465733691

Date of advice: 27 October 2025

Ruling

Subject: CGT - deceased estate

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'.

The sale of the property was delayed past the 2-year period due to sensitive issues around health for Child 1 requiring ongoing medical assessments and monitoring, to ensure it was suitable for them to continue living in the property on a long-term basis, and ultimately to be able to purchase the property from the estate, in line with the families wishes.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The deceased passed away in early-to-mid 20XX.

The dwelling is located in Australia (the property).

The deceased acquired the property after 20 September 1985.

The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time.

The property was situated on less than two hectares of land.

Prior to their death, the deceased lived at the property with their child (Child 1).

Many years ago, Child 1 suffered an accident and required ongoing care.

During 20XX, the deceased became ill and was hospitalised.

In mid-20XX, the deceased entered a care facility. It was recognised that the deceased could no longer support Child 1, and a family care team attempted to adjust child 1's needs to support them.

In early 20XX, just before the deceased passed away, a review of child 1's needs was requested and a health assessment was conducted.

The deceased's Will appointed their other children, Child 2 and Child 3 (Child 1's siblings) as executors of their estate.

Child 2 and Child 3 were Child 1's guardians appointed by the courts; however, Child 1's finances were managed by an official authority (the authority).

Following the deceased's death, Child 2 and Child 3 intended to sell their stake in the property to Child 1, who continued to occupy the property.

Child 2 and Child 3 were concerned for Child 1s ability to live at the property without adequate support. Child 1's support groups held meetings and agreed that it was best that they remained in the home for as long as possible.

Child 2 and Child 3 supported this as to not cause any disruption to Child 1.

It was the deceased's wishes that Child 1 could continue to live independently.

Child 1's situation is complex, and despite Child 2 and Child 3's initial intention sell their stake in the property to Child 1 (which was in line with the families wishes), there were some initial doubts about whether Child 1 could remain living in the property.

Throughout 20XX and 20XX, Child 1's health and safety was monitored by medical professionals and social workers to ensure that they could continue to live at the property. This was done via medical health assessments, community support worker assistance, occupational therapy, and other domestic assistance.

In mid-20XX, probate was granted.

Following this, there were several months of 'watch and wait' regarding Child 1's progress. This took considerable time.

In late 20XX, an application was submitted for Child 1 requesting Government assistance to enable them to continue living at the property, with the required level of ongoing support.

In mid-20XX, a meeting was held with specialists regarding Child 1's needs and a care plan was reviewed.

There was also an additional delay in Child 1 obtaining finance from the authority (who managed their finances) to purchase the property. This was despite ongoing follow up from Child 2 and Child 3.

You entered into a contract to sell the property to child 1 in mid-20XX, with settlement occurring a few weeks later.

Relevant legislative provision

Income Tax Assessment Act 1997 section 118-195

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