Edited version of private advice

Authorisation Number: 1051944275506

Date of advice: 4 February 2022

Ruling

Subject: CGT - 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 this discretion can be found by searching 'QC 66057' on ato.gov.au

This ruling applies for the following periods:

Year ended 30 June 20XX

The scheme commences on:

4 July 20XX

Relevant facts and circumstances

The Deceased owned a Dwelling and lived in it as their main residence.

The Deceased passed away sometime after 20 September 1985.

The Deceased's family knew that a will had existed, however the will was unable to be located.

On XX November 20XX the deceased's lawyer advised the Deceased's child, Person A, to draft a deed with their siblings, stating that they were aware of the will's contents but could not locate it.

From then until June 20XX Person A spent time between their house and the Deceased's looking for the will and keeping the estate in good order.

On XX June 20XX Person A lodged probate. Person A's siblings agreed that Person A should handle it as they lived too far away.

The Court requested more information which was completed and lodged.

On XX August 20XX Person A received Letters of Administration, which were dated XX August 20XX.

After receiving the Letters of Administration, Person A set about getting the Dwelling ready for sale and distribution, completing paperwork for banks, insurance companies, life insurance policies, superannuation, cleaning out the property, painting, and a general clean up.

With Christmas approaching Person A was aware that the Dwelling needed to be listed on the market and sold before the two year period had passed.

On XX January 20XX Person A was contacted by a family member in regards to purchasing the Dwelling. After a couple of weeks of negotiations this sale fell through.

In late February 20XX Person A contacted a real estate agent to get the Dwelling on the market and sold. He was advised that houses in Town X were in demand and selling fast, spending about XX days on market.

In early to mid March 20XX the Dwelling was listed for sale.

Just after it was listed a Public Health Emergency was declared due to COVID-19.

Restrictions were placed on indoor gatherings and the Government imposed stay at home orders, with only essential workers allowed out. This hampered the ability for the Dwelling to be viewed by potential buyers during this period.

The Dwelling was sold on XX July 20XX.

Settlement occurred on XX October 20XX.

The Contract was signed with settlement occurring two years and three months after the deceased's death.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 104-10

Income Tax Assessment Act 1997 section 118-195