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Edited version of private advice
Authorisation Number: 1051966694850
Date of advice: 25 May 2022
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise the discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two-year period until August 20XX to dispose of The Property?
Answer
Yes, having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time until August 20XX to dispose of The Property. Further information about this discretion can be found by entering 'QC 66057' into the search bar at ato.gov.au
This ruling applies for the following periods:
Income year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
Person 1 and Person 2 (Deceased) acquired the property (The Property) in 19XX.
Person 1 passed away and the title transferred to Person 2 in 19XX.
Person 2 passed away in 20XX.
The property formed part of their Estate.
The Will bequeathed the Estate equally among their children.
The Will provided no special instructions in relation to any of the assets.
The children were also listed as the executors of the estate.
At the time of Person's 2 death, one of their children (Person 3) had been living in the Property. They had lived at the property with Person 2 for over XX years. They were XX years of age, and was experiencing a medical condition They had no other home.
Out of compassion for their sibling, the other executors allowed Person 3 to live in the property (rent free), until they entered a nursing home in 20XX.
The Property was immediately placed on the market following Person 3 moving into the nursing home.
The contract of sale for the Property was entered into in 20XX.
The Settlement date of the Property occurred after 30 June 20XX.
The executors sought legal advice in the early years of the estate, but were never advised of the two year CGT main residence exemption.
Person 3 was removed as an executor in 20XX as they were considered unfit to carry out these duties due to their medical condition.
The executors changed legal firms in the same year (20XX).
The Estate remained unadministered as Person 3 had no capacity to pay the other beneficiaries for the home, and due to their medical condition it was considered necessary for them to stay living in the property for safety reasons.
Documentation has been provided outling Person 3's medical condition.
A letter from the aged care services has been provided outlining concerns that Person 3 could not continue living at the property due to safety and wellbeing concerns just before they went into the nursing home.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195
Income Tax Assessment Act 1997 Section 104-10