Edited version of private advice

Authorisation Number: 1051935030946

Date of advice: 21 December 2021

Ruling

Subject: Commissioner's discretion - deceased property

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 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 66057" on ato.gov.au.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

In 20XX the deceased acquired a dwelling.

The dwelling was the deceased's main residence and was on less than two hectares of land.

The deceased passed away.

You are the sole beneficiary of the deceased's estate.

The Public Trustee was appointed executor and trustee of the will of the deceased.

In late 20XX the Public Trustee commenced administering the estate.

Prior to the deceased's death, another individual was living in the property with them. This individual was not provided with a right to occupy the premises in the deceased's will.

The individual made a claim on the property, refusing to vacate after being requested to do so.

In late 20XX the Public Trustee requested the individual return the keys to the property.

In late 20XX Probate was granted after which the individual removed their belongings from the residence.

In early 20XX the individual obtained legal representation to assist them with a claim on the property.

Around mid 20XX the Public Trustee finalised administration of the estate and you were given the access to the property. This was the first time you had been inside the residence for approximately 3 years and you found it to be in a state of disrepair. You discovered damage to internal walls and the roof, nor had the gardens been maintained.

In mid 20XX you attempted to obtain quotes for repairs. Due to the nature of the proposed repair work and expected recurring damage to the property due to the ongoing drought, the insurer would not guarantee any repairs. They made a lump sum payment so that you could organize these yourself.

Covid 19 restrictions caused delays in tradespeople being able to physically attend the property to undertake repair work.

Around early 20XX you were finally able to organise tradespeople to attend the property. You had plumbing, internal wall and plasterboard repairs made and the leaking tile roof repointed. You organised mould removal from affected areas inside the property and repainting.

The works undertaken were to make the condition of the residence safe and habitable. These were not improvements, additions, or renovations.

In mid 20XX the house was then put up for sale, with settlement occurring mid 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195