Edited version of private advice

Authorisation Number: 5010113538957

Date of advice: 19 June 2025

Ruling

Subject: CGT - deceased estate

Question 1

Will the Commissioner exercise his discretion under section 118-195 of the 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 ruling applies for the following period:

30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

Person A passed away on XX XXX 20XX.

The deceased's main residence was the property situated at Address A. Person A held 90% share in the property.

The beneficiaries of the estate are the deceased's 5 adult children, Person B, Person C, Person D, Person E and Person F

The administrators promptly arranged an appointment with the lawyers on XX XXX 20XX.

Following discussions with their siblings (The other beneficiaries) regarding who to act as the administrators, they engaged to act in the estate on X XXX 20XX.

Multiple attempts were made by the siblings to locate a will but was unsuccessful.

On XX XXX 20XX it was advised by the administrators to administer the estate without a will. A grant of letters of administration was applied on the same day.

On X XXX 20XX Person B lodged a probate caveat preventing the grant from being issued, disputing who should be appointed as the administrator/s of the estate.

On XX XXX 20XX Person B's lawyer had contacted Person E and Person C's lawyers advising of an inheritance claim, instructing to not distribute the estate until the claim was resolved.

The lawyers contacted again on XX XXX 20XX to reiterate the request.

The caveat was withdrawn on XX XXX 20XX and the grant of letters of administration was subsequently issued on XX XXX 20XX confirming that the administrators to be Person E and Person C.

The administrators had difficulty in contacting another beneficiary Person D to provide relevant tax affairs in the estate causing delays thus leading to the lawyers requesting Person D for the necessary documents in their possession on XX XXX 20XX.

Person B advised he would not be making a claim via their lawyer on X XXX 20XX, resulting in a period of approximated X months (XX XXX 20XX - X XXX 20XX) where administration of the estate could not be finalised.

Person F another beneficiary continued to live in the property following the deceased's passing, indicated that they would like to pay out the other beneficiaries to retain the property for themself.

Person F did not provide a formal notice of their intention and indicated that finance would be required to facilitate this thus resulting in further delays.

On X XXX 20XX the administrators instructed the lawyers that Person F was liaising with a broker and would make and offer once the process had finalised.

The ownership of the property was further challenged by Person B who owned 10% of the property advised the administrators that he was not going sell the property unless it was sold.

The property needed to be valued before an agreement was reached between beneficiaries. The valuations were completed between XXX - XXX 20XX.

Person F provided an offer in writing to the administrators on X XXX 20XX which was finalised and communicated to the other beneficiaries of the estate on XX XXX 20XX.

A deed of family arrangement was prepared and circulated on XX XXX 20XX however due to amendments the final deed was circulated for signing on X XXX 20XX.

Person F was the last party to sign the deed on XX XXX 20XX (Delay of 2 months for all parties to sign the deed).

Person F finance approval was issued a month later on X XXX 20XX.

Settlement for the property was scheduled on X XXX 20XX however could be completed due to withdrew from the settlement advising they could no longer provide the funds.

Person F engaged another bank and settlement was completed on XX XXX 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195

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