Edited version of private advice

Authorisation Number: 1051958547228

Date of advice: 9 March 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 had five children who were beneficiaries of their Will, these were A, B, C, D and E.

The deceased's Will was dated XX/XX/19XX and appointed both A and B as Executors and Trustees.

Probate was granted on XX/XX/20XX.

The deceased owned a dwelling solely and treated it as their main residence.

The deceased also owned a two thirds interest in a dwelling as tenants in common with the other one third interest owned by A.

Both dwellings were acquired prior to 20 September 1985.

The land adjacent to each of the dwellings is less than two hectares in area.

A and B resided in the dwelling A held a one third interest in and treated it as their main residence.

C resided in the dwelling the deceased owned solely and treated it as their main residence.

Transmission applications were lodged on XX/XX/20XX and both dwellings were registered in the names of the executors.

Between 20XX and 20XX a dispute developed between executors A and B, and the three other beneficiaries of the Will, C, D and E.

In Month 20XX the beneficiaries engaged the services of a law firm to assist them regarding their entitlements to the estate which resulted in extensive correspondence being exchanged between the different solicitors acting on behalf of the executors and beneficiaries.

The executors and beneficiaries held a meeting on XX/XX/20XX where it was agreed to attend mediation.

In XX/20XX the executors terminated their first solicitor.

The executors owed monies to their first solicitors and the bank account which formed part of the estate was already exhausted leaving only the dwellings as the remaining assets in the estate.

On XX/XX/20XX the executors instructed new solicitors.

In XX/20XX the executors appointed the new solicitors.

Mediation occurred on XX/XX/20XX with no resolution achieved.

At least X separate pieces of correspondence were exchanged between XX/XX/20XX when probate was granted, through to the date of mediation on XX/XX/20XX.

Further correspondence was entered into by the solicitors for both parties from XX/20XX to XX/20XX.

In XX/20XX the beneficiaries commenced proceedings in the State Supreme Court for removal of the executors.

An independent administrator (the Administrator) was appointed by the court in XX/20XX.

The court was delayed in making the Grant of Letters of Administration which were issued X months later on XX/XX/20XX.

Once the Grant of Letters of Administration occurred, the Administrator then attended to removal of caveats lodged on the titles of the two dwellings of the estate.

Transmission of the dwellings to the Administrator was effected in XX/20XX.

The Administrator also registered the properties for land tax with the responsible state authority.

The Administrator spent several weeks investigating land contamination of a neighbouring property and whether this impacted the subject land.

The Administrator spent several months liaising with the occupants of the properties, all of whom were beneficiaries of the estate in relation to the removal of household items and rubbish and undertaking the work required to ready the dwellings for marketing and sale.

One of the occupants suffered from a xxxx disorder and hampered the Administrator in his efforts to ready the properties for marketing and sale.

Several meetings were held separately with the removed executors and the other beneficiaries to arrange for the sale of the dwellings.

The Administrator obtained marketing proposals and appraisals from three different real estate agents including those requested by A for the dwelling they had a one third ownership interest in.

The properties were listed for sale in XX/20XX.

Contract of sale for both dwellings were signed on XX/XX/20XX.

Settlement for both dwellings occurred on XX/XX/20XX.

Relevant legislative provisions

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