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Edited version of private advice
Authorisation Number: 1051645088778
Date of advice: 12 March 2020
Ruling
Subject: Income tax - deceased estate - two year discretion
Question 1
Will the Commissioner allow an extension of time for the executor to dispose of your ownership interest in Property A 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
Question 2
Will the Commissioner allow an extension of time for the executor to dispose of your ownership interest in the dwelling and two hectares only of the adjacent land at Property B and disregard the capital gain you make on this part of 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:
1 July 20XX
Relevant facts and circumstances
The deceased acquired a property (Property A) some XX years ago. The deceased acquired another property (Property B) before 1985.
The deceased passed away in 20XX.
Property A was the deceased's main residence at the time of death.
A legal dispute had to be settled before probate could be granted. The executor accepted administration of the estate dwelling when probate was granted some four years after the deceased's date of death.
The size of Property A is less than two hectares.
The size of Property B is more than two hectares.
Property A was not used to produce assessable income.
Both properties were placed on the market for sale immediately after probate with the sales occurring shortly afterwards.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 subsection 118-130(3)
Income Tax Assessment Act 1997 section 118-195
Income Tax Assessment Act 1997 subsection 118-195(1)