Edited version of private advice

Authorisation Number: 1051888561198

Date of advice: 19 August 2021

Ruling

Subject: Deceased estate - 2 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 ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

The deceased and their spouse purchased a residential dwelling prior to 1985.

The land the dwelling was situated on was less than X hectares.

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

The dwelling was never rented out and was occupied by the deceased as their main residence during the ownership period until the date of their death.

The will of the deceased appointed one of their two children, Individual A, as executor of the estate.

Individual A had been living in the dwelling caring for the deceased for some years prior to their death.

Less than one year after the date of death, probate of the will was granted to Individual A and the dwelling was transferred to Individual A in their capacity as executor of the estate.

The beneficiaries of the estate were children of the deceased, Individual A and Individual B.

A clause in the will gave the Trustee of the estate the power to allow any beneficiary named in the will to occupy, have custody of or use any immovable property or chattels which formed part of the estate.

Individual A occupied and used the dwelling as their main residence during the whole of the period from the date of the deceased's death to their own death, which occurred less than two years after the deceased died. Individual A had no other property or main residence during this period.

Individual A occupied and used the dwelling until their death with the permission of Individual B.

The dwelling was not rented out following Individual A's death.

Individual A was diagnosed with a terminal illness prior to the date of death of the deceased and suffered from anxiety and depression associated with the illness. The illness impacted on the ability of Individual A to carry out matters associated with the estate and the dwelling.

Individual A's will appointed Individual B and Individual C as executors of the estate.

Individual B and Individual C were deemed to be the new executors of the estate of the deceased.

A contract for the sale of the dwelling was entered into just over two years past the date of death of the deceased.

Settlement for the sale of the dwelling occurred just over two years and two months after the date of death of the deceased.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195