Edited version of private advice

Authorisation Number: 1051958912670

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 and their late partner purchased the dwelling as joint tenants prior to 20 September 1985.

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

The deceased's late partner passed away on XX/XX/20XX and their share of the property was transferred to the deceased by way of survivorship.

The dwelling was the main residence of the deceased and never used for the purpose of producing assessable income.

Prior to their death, the deceased moved to live with a child interstate but continued to treat the dwelling as their main residence.

The deceased's Will dated XX/XX/20XX appointed their children A, B, C and D as Executors and Trustees of the Estate.

The deceased had two other children who were not named as Executors but were beneficiaries of the estate, these were E and F.

F suffers from a xxxx disability rendering F unable to work.

F resided with their parent in the dwelling until their relocation interstate, F continued to reside in the dwelling up until it was sold in XX/20XX.

From the deceased's death, B, C and D commenced identifying the assets of the deceased and bringing them into the estate including various rental properties.

Probate was granted to B, C and D on XX/XX/20XX.

After probate was granted, multiple disputes arose between the Executors on how best to administer the estate which was particularly focused on how to deal with the estate properties.

The Executors also attempted to resolve issues with the construction of the Will by seeking Counsel's advice because it was indeterminate if it granted a right to reside in the dwelling to beneficiaries.

The Executors were attempting to locate suitable accommodation for F, a disagreement ensued regarding appropriating one of the xxxx for F and to sell the xxxx separately or to sell the entire property as one with no provision for F.

Another disagreement was focused on selling the dwelling and investment property together as one to a developer or to sell the properties individually.

There was a dispute over another property in the estate as all of the parties treated this as one of their properties for a long time.

How to deal with the deceased's personal belongings also resulted in a dispute between the Executors.

As a result of these multiple disputes, all three Executors agreed to step down and have an Administrator appointed.

An application was filed with the Supreme Court by D to have an Administrator appointed by the Court.

A Supreme Court hearing occurred on XX/XX/20XX where appointment of an Administrator of the estate occurred.

Grant of Letters of Administration to the Administrator occurred on XX/XX/20XX.

The Administrator discovered that the estate of the deceased's late partner was yet to be administered and sought to be appointed as Administrator of this estate as well.

There were delays in appointing the Administrator as the Administrator of the deceased's partner's estate as the Will could not be located.

The Administrator then sought about transmitting the properties of the estate including the dwelling to reflect the change of Administrator of the estate.

The disputes were ongoing after appointment of the Administrator and these were not resolved until XX/20XX where an agreement was reached, and all parties engaged in the process to give effect to the agreed-to resolution.

The Administrator engaged a real estate agent on XX/XX/20XX.

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

A contract of sale was signed on XX/XX/20XX.

Settlement occurred on XX/XX/20XX.

Relevant legislative provisions

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

Income Tax Assessment Act 1997 subsection 118-145(3)

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