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Edited version of private advice
Authorisation Number: 1051967608069
Date of advice: 4 April 2022
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
Will the Commissioner accept that for the units of accommodation, that the term 'dwelling' as defined in section 118-115 of the Income Tax Assessment Act 1997 includes more than one unit of accommodation?
Answer
Yes.
Having considered your circumstances and the relevant factors in Taxation Determination TD 1999/69 Income tax: capital gains: can the term 'dwelling' as defined in section 118-115 of the Income Tax Assessment Act 1997 include more than one unit of accommodation?, the Commissioner accepts that the two units of accommodation are considered to be one dwelling.
Question 2
Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling (the property) 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 ato.gov.au for 'QC 66057'.
This ruling applies for the following period:
The year ending DD/MM/YYYY
The scheme commences on:
DD/MM/YYYY
Relevant facts and circumstances
The deceased passed away on DD/MM/YYYY.
The deceased acquired a 50% interest in the property before 20 September 1985.
The deceased acquired the other 50% interest in the property after 20 September 1985.
The property was situated on less than two (2) hectares of land.
Probate was granted on DD/MM/YYYY.
Several years before the deceased's death, development consent was approved for a second unit of accommodation to be constructed at the rear of the property.
The original unit of accommodation was the family home and the main residence of the deceased throughout their ownership period (the original unit).
The second unit of accommodation on the property was built to allow for a close relative and their spouse to care for the deceased.
The daily activities of the occupants of the units were integrated. The units were not treated as separate properties. The close relative and their spouse undertook caring responsibilities for the deceased. This involved constant interaction between the occupants.
The deceased's Will provided that the property was to be subdivided.
Following the grant of probate, the executors found the subdivision approval process was protracted and complicated, leading the executors to decide it would be more expedient to sell the property as is.
A Deed of Family Arrangement was entered into on DD/MM/YYYY to vary the Will to exclude the need for subdivision.
You entered into a contract to sell the property on DD/MM/YYYY with settlement occurring less than two months after the expiration of the two-year period.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-115
Income Tax Assessment Act 1997 section 118-195