Edited version of private advice

Authorisation Number: 1051935242271

Date of advice: 13 January 2022

Ruling

Subject: Commissioner's discretion - deceased estate

Question

Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the house and disregard the capital gain you make 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 commenced on:

1 July 20XX

Relevant facts and circumstances

At some time after 1985, the deceased bought the house which was their main residence until they passed away in late 20XX.

The deceased left the house in their estate to their two children. The house remained vacant until the house settled.

Shortly after the deceased passed away, Beneficiary A's solicitor advised that the house could not be sold for the first five months. Beneficiary A experienced deep and extreme grief. They had several visits to their general practitioner who explained it to be like PTSD. Attending the house was overwhelming for them.

The house required repairs for health and safety reasons before it could be listed for sale. This included the removal of a faulty un-flued gas heater in the lounge room and a leak in the bathroom shower.

In early 2020, the state experienced a series of rolling COVID-19 lockdowns and restrictions. During this time there were several lengthy periods where the executor and beneficiaries located interstate were unable to visit the house and arrange for contractors to inspect and quote to rectify the two issues.

Beneficiary A was required to learn new online work practices and technologies. Their work obligations were significant. This also significantly impacted their ability to travel to the house and sort through the deceased's belongings and start to understand what urgent and critical work needed to be done to the house.

In mid-2020, State Governments started to ease restrictions. Beneficiary A made several trips to the house between mid-20XX and late 20XX to arrange works and remove furnishings and items to prepare the house for sale.

In early 20XX, the executor and beneficiaries contracted a company to complete the repairs to make the property safe for sale. Further delays from COVID-19 restrictions caused the contractor to reschedule the work, resulting in the repairs being completed in mid-20XX.

Shortly after, the house was listed for sale, sold within one month and settled within three months after the two-year period expired.

Relevant legislative provisions

Income Tax Assessment Act 1997 subdivision 115-A

Income Tax Assessment Act 1997 section 102-20

Income Tax Assessment Act 1997 section 104-10

Income Tax Assessment Act 1997 section 118-120

Income Tax Assessment Act 1997 section 118-130

Income Tax Assessment Act 1997 section 118-195