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Edited version of your written advice
Authorisation Number: 1051428646274
Date of advice: 12 September 2018
Ruling
Subject: Deceased estate and the main residence exemption
Question
Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two year period?
Answer
Yes.
Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au.
This ruling applies for the following periods:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased acquired the property before 20 September 1985.
The deceased occupied the property as their principle place of residence at the time of their death.
The deceased died in mid 20XX.
At the time of the deceased’s death a child of the deceased lived with them as their carer.
There was no right to occupy in the will, they occupied by right of agreement with the other beneficiaries.
The property was not used to produce income after the deceased’s death.
The executor’s of the Will were Child A and Child B.
The executor’s resided in different states at the time Probate was granted.
Prior to their death, the deceased requested that the executors not apply for grant of probate for a period of XX months after their death.
The executors applied for grant of probate of their Will, in mid 20YY.
To satisfy the Supreme Court as to the delay in making the application the executors swore an affidavit in mid 20YY.
The estimated value of the property in the grant of probate was $XX.
In early 20YY Child B’s spouse underwent several serious medical procedures. This went for an extended period of time.
Following the grant of probate Child B proposed acquisition of the property by them. They submitted a Deed of Arrangement to a meeting of some of the beneficiaries and the co-executor.
The proposal was rejected by the co-executor.
No resolution was obtained of the proposal and other estate issues until mediation between all beneficiaries, including the executor’s, which was held in late 20ZZ.
Following mediation an independent solicitor was appointed to have carriage of the sale of the property and to appoint a real estate agent for that purpose and to set a reserve price of the property, set by the appraisal of the relevant real estate agent.
Pursuant to the mediation agreement, the property was listed for sale by public auction.
The auction was held in early 20AA.
The property was sold and settled in early 20AA for $XX.
The mediation between all parties was also as a consequence of other matters in dispute between the executors and the general administration of the estate. This was resolved at mediation.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195