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Edited version of private advice
Authorisation Number: 1051875372030
Date of advice: 26 July 2021
Ruling
Subject: Deceased estate - two year discretion
Question
Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the property and disregard the capital gain you made on the disposal?
Answer
Yes. Having considered the circumstances and the relevant factors, the Commissioner will allow an extension of time. It is noted that all intended beneficiaries of the respective estates lived in the dwelling as their main residence from when the dwelling was acquired until the dates of their respective deaths.
This ruling applies for the following period period:
Year ending 30 June 2021
The scheme commences on:
1 July 2020
Relevant facts and circumstances
The deceased acquired a 100% interest in a residential property prior to 1985.
The deceased transferred an interest in the property to Individual A prior to 1985.
Individual A was married to a relative of the deceased, Individual B.
The deceased had a spouse.
The deceased died after 1985 and was followed at irregular intervals over many years by the spouse, Individual B and finally Individual A.
The property was the main residence of the deceased, the spouse, Individual A and Individual B until their respective deaths.
Pursuant to the will of the deceased, their estate was left equally to the spouse and Individual B.
Pursuant to the will of the spouse, their estate was left to Individual B.
Pursuant to the will of Individual B, their estate was left to Individual A.
Notwithstanding the wills of the deceased, the spouse and Individual A, their estates were never administered, leaving legal title to the deceased's interest in the property in the deceased's name.
The remaining interest in the property remained in the name of Individual A.
Administrators of the estate of the deceased were appointed by way of issue of a grant of letters of administration less than two years after the death of Individual A. The estate was administered in accordance with the relevant state law.
Settlement for the sale of the dwelling occurred less than two years after the grant of the letters of administration.
The adminstrators of the estate understand that steps were not taken to administer the respective estates due to language and cultural barriers, and the lack of understanding of the requirements for probate and transfers of legal title to the property.
The property was less than 2 ha in size.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195