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Edited version of private advice
Authorisation Number: 1051687263064
Date of advice: 26 May 2020
Ruling
Subject: Two year discretion and rental income of a deceased estate
Question 1
Will the Commissioner exercise his discretion to extend the 2 year period under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) for a property?
Answer 1
Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. More information about this discretion can be found on our website at ato.gov.au using search code 'QC 52250'
Question 2
Is the rent received assessable income of the deceased estate?
Answer 2
Yes. The responsibility for declaring income and paying tax depends on the stage of administration and the beneficiaries' circumstances. Before probate is granted, beneficiaries are not presently entitled to the income of a deceased estate. Therefore the trustee is responsible for declaring any income of the deceased estate. More information on 'Declaring income and paying tax in the stages of administration' can be found on our website using search code 'QC 49907'.
This ruling applies for the following periods:
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014
Year ended 30 June 2015
Year ended 30 June 2016
Year ended 30 June 2017
Year ended 30 June 2018
Year ended 30 June 2019
The scheme commences on:
1 July 2010
Relevant facts and circumstances
The deceased purchased the property in the 1990's.
The deceased was the sole owner of the property and it was their main residence up until they went missing.
The deceased's mother resided at the property rent free for a number of years before moving into aged care.
The property then remained vacant for a few years.
Upkeep and maintenance costs of the property were subsidised by a relative of the deceased's until it was rented to help towards holding and maintenance costs of the property
A death certificate was granted in the 2017-18 financial year, recording the date of the deceased's death as being soon after they went missing.
Letters of Administration were granted in the 2018-19 financial year.
The property was sold and settled in the same year.
Relevant legislative provisions
Income Tax Assessment Act 1997 (ITAA 1997) Section 118-195
Income Tax Assessment Act 1997 (ITAA 1997) Section 6-5