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Edited version of private advice
Authorisation Number: 1051613777686
Date of advice: 3 December 2019
Ruling
Subject: Income tax - deceased estate- 2 year discretion
Question
Will the Commissioner allow an extension of time to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal?
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 period:
Year ended 30 June 20XX
The scheme commences on:
13 February 20XX
Relevant facts and circumstances
The deceased resided in the property until their death.
Property is XX.XX hectares.
Probate was granted on xx/xx/xxxx.
Property was sold on xx/xx/xxxx.
Property was settled on xx/xx/xxxx.
There was a delay in the sale of the property for the following reasons;
· Difficulty in locating one of the executors named in the will and effecting service of documents on such named executor, despite engaging process servers and private investigators to assist.
· Bringing to an end an application for grant of probate for an earlier will.
· There was a change of solicitors of one of the named executors and such solicitor having difficulties contacting his client to obtain instructions.
· Supreme Court proceedings were commenced for writ of possession.
· Caveat being lodged over the title to the property which needed resolution.
· Inability of executors to obtain access to the property.
· Dispute between executors and beneficiaries which resulted into entering a Deed of Family Arrangement
· Executors having to obtain counsel's opinion as to their rights.
· Executors' application for grant of probate having to be approved by other solicitors.
· Further delay incurred in having to proportion loan over property as between the deceased and one of the executors.
· After a Grant of Property, the property was ready to be sold. However, before doing so, it was opined by legal counsel that the water access licence was to be included in the sale to increase the value of the realty. This lead to further delay in that further documentation was to be considered, completed, signed and returned to the mortgagee's solicitors, as a result of which, the first auction date had to be abandoned.
· Delay in transmitting the property into the name of the executors in that there was a caveat on title - caveator's consent had to be sought, which was ultimately received, but we had to wait for receipt of consent documents.
· Delay in selling property due to there being competing purchasers with differing requirements and requests, all such offers having to be considered and agreed to by the executors.
· Delay in appointing a selling agent due to non-agreement between the executors.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195