Edited version of private advice

Authorisation Number: 1051878522314

Date of advice: 24 August 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 dwelling and disregard the capital gain you made on the disposal?

Answer

Yes. Having considered the circumstances and the relevant factors outlined in Practical Compliance Guideline PCG 2019/5, the Commissioner will allow an extension of time.

This ruling applies for the following period period:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

The deceased and her spouse built a dwelling prior to 1985, which was their main residence.

The land on which the dwelling was situated was less than XX hectares in size.

The spouse of the deceased passed away prior to 1985 and the deceased became the sole owner of the dwelling.

The deceased died and the grant of probate was issued three months after the date of death.

The dwelling was congested with possessions as the deceased had an aversion to disposing of unwanted or unnecessary items. It took considerable time to sort and remove the items.

The government in the state the house was situated in issued various COVID-19 related stay at home directions and travel restrictions which had effect during the year. The restrictions prevented access to the dwelling for a number of months.

Approximately one year and 10 months after the date of death, discussions were held with a real estate agent and a valuer was engaged. Around the same time, the final large amount of rubbish was removed from the dwelling/property.

Two years and four days after the date of death, a contract for the sale of the dwelling was signed with a 90 day settlement period.

Settlement for the sale of the dwelling occurred two years and three months after the date of death.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195