Edited version of private advice

Authorisation Number: 1051949069191

Date of advice: 14 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 dwelling was the main residence of the deceased until their death and was not used to produce assessable income.

The land adjacent to the dwelling is less than two hectares in area.

The deceased's Will appointed a friend of the deceased as Executor.

Probate was granted on xx/xx/20xx to the Executor.

The Executor's main residence was over an hour away from the dwelling by car and they also worked as a shift worker which restricted their ability to attend the dwelling more frequently.

Delays in obtaining probate were attributed to three large sheds on the land adjacent to the dwelling which were full of the deceased's chattels including antiques described in the Will that needed to be dealt with by the Executor.

The antiques described in the Will required valuation which was delayed due to the valuer located in a capital city losing photos of the antiques.

The delays attributed to disposal of the antiques as described in the Will contributed to delays in applying for probate.

While there were no legal challenges to the Will, a sibling of the deceased was quite vocal in their opinions that a friend should not be executor of their sibling's estate and made their presence felt when instructing the Executor how to administer the estate further hindering the administration.

Beneficiaries of the Will included the deceased's two estranged children and the deceased's grandchild who all lived a significant travelling distance from the dwelling.

Five months of state government imposed travel restrictions prevented beneficiaries from attending the dwelling to collect items bequeathed to them.

When all parties were permitted to travel unrestricted, there was still some hesitancy from beneficiaries to travel.

The items bequeathed to the beneficiaries were very large items, this coupled with a general unwillingness from the beneficiaries to attend the dwelling to collect the items contributed to delays in administering the estate

When times were arranged for all parties involved to travel from their respective main residences to the dwelling, there were times the beneficiaries cancelled or would not attend requiring further follow-up on behalf of the Executor and causing further delays.

In addition to beneficiaries being unwilling to collect their bequeathments, the sibling of the deceased strongly encouraged the Executor to continue with the distributions to the beneficiaries as it was her sibling's wishes under the Will that these distributions occur.

The real estate agent was engaged about week commencing xx/xx/20xx.

The dwelling was listed for sale on xx/xx/20xx.

The contract of sale was signed on xx/xx/20xx.

Settlement of the dwelling occurred on xx/xx/20xx.

Relevant legislative provisions

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