Edited version of private advice

Authorisation Number: 1051944114102

Date of advice: 3 February 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 dwelling and disregard the capital gain or loss 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 the Commissioner's discretion can be found by searching 'QC 66057' on ato.gov.au.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

The deceased passed away on xx/xx/20xx.

The deceased acquired the dwelling after 20 September 1985.

The land on which the dwelling is located is less than Xha in area.

The deceased moved into a nursing home on xx/xx/20xx. While residing in the nursing home, the deceased continued to treat the dwelling as their main residence.

The dwelling was rented from xx/xx/20xx to assist with the costs of the nursing home.

The executor of the deceased's estate was the youngest child of the deceased.

The executor was the primary carer for their other parent who had terminal cancer at the time of the deceased's death.

The executor's other parent passed away in xx/20xx.

The executor was then the sole executor of both parent's estates.

The executor experienced personal issues for a period after both parent's deaths delaying their ability to administer the estate.

The executor exhausted all long service and annual leave balances with their employer during the period they were caring for their terminally ill parent.

The executor resided interstate to the location of the dwelling and was unable to travel to personally see to the disposal of the dwelling due to the exhausted leave balances.

The executor's sibling was undecided and unforthcoming as to whether they would choose to purchase the dwelling leading to delays in marketing the dwelling for sale and ultimate disposal of the dwelling.

The executor commenced looking for a real estate agent in xx/20xx where they were provided advice from the agents that there were buyers waiting for properties. This gave the executor the impression that the disposal of the dwelling would occur within two years of the deceased's death.

On xx/xx/20xx the executor advised the property manager that the dwelling was being sold by another agency as vacant possession or tenanted if the tenants wished to remain.

The executor engaged the services of a real estate agent to sell the dwelling on xx/xx/20xx.

The title transfer to enact the sale of the dwelling was obtained on xx/xx/20xx

The dwelling was rented on a six-month lease at the time of the deceased's death and then on a periodic lease until the date when the tenants moved out.

The agent engaged to sell the dwelling demonstrated via photos that the dwelling was in a poor state of repair impacting the saleability.

The selling agent and executor requested the tenants tidy the house during which time a dispute between these parties commenced and created difficulties accessing the dwelling.

On xx/xx/20xx the tenants were given 60 days' notice to vacate the dwelling.

The executor accessed all available leave balances that had accumulated since being previously exhausted to care for their terminally ill parent to travel to the dwelling for the purpose of repairs prior to listing for sale.

An offer to purchase the dwelling with a deposit being outlaid by the buyer was received in xx/20xx with settlement due on xx/xx/20xx however this contract fell through.

A contract for sale of the dwelling was signed on xx/xx/20xx with settlement occurring on xx/xx/20xx.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 118-145(1)

Income Tax Assessment Act 1997 subsection 118-145(2)

Income Tax Assessment Act 1997 subsection 118-195(1)