Edited version of private advice

Authorisation Number: 1051974254235

Date of advice: 22 April 2022

Ruling

Subject: Commissioner's discretion - deceased estate

Question

Will the Commissioner allow an extension of time for you to dispose of the property and disregard the capital gain you make on the disposal?

Answer

Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 66057' on ato.gov.au.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

At some time prior to 20 September 1985, the deceased and their spouse (who predeceased the deceased), bought the property as joint tenants.

The property size is less than two hectares. It was the primary residence of the deceased and their spouse, and has not been used to produce income at any time. It has not been occupied since the death of the deceased.

At some time after 1985, the deceased's spouse passed away. The deceased acquired their share of the property through survivorship.

Later, the deceased passed away. Their will named their spouse, as the sole executor and sole beneficiary. The will provided for the eventuality of their spouse predeceasing the deceased. According to the will, were their spouse to die before the deceased, the two joint instituted executors, become the two, and only, offspring of the deceased and their spouse. The two offspring were appointed the joint instituted executors.

Shortly after, Executor 1 met with Executor 2 to discuss a plan for the estate. Executor 2 disputed the need for a grant of probate. Executor 1 advised Executor 2 probate was required because title was not transferred into the deceased's name when their spouse died.

The Supreme Court confirmed that they needed a grant of probate, and then (using that) arrange for title transfer. Executor 1 identified there was a spelling mistake on the death certificate. Executor 1 and Executor 2 had a major falling out over the plan for the estate.

Executor 1 received corrected death certificate.

Executor 2 advised Executor 1 that they were unwell and having trouble completing their tasks.

Executor 2 advised the deceased's life insurance is sorted meaning they can apply for probate.

Executor 1 and 2 had their first meeting with their solicitor. Shortly after, they lodged a probate application at the Supreme Court. Probate was granted.

Executor 2 advised Executor 1 they have massive issues at work and is unable to deal with estate matters for the next few months.

Executor 2 advised Executor 1 they were unwell due to an infection and have taken time off work. Also, they needed to have dental treatment.

Executor 1 met with Executor 2 to discuss plans. Executor 2 advised they were unwell, stressed, and have legal issues at work. Executor 2 indicated they want to do everything jointly but says they are too drained to find time.

Executor 1 asked Executor 2 for one hour per week to help with the estate tasks. Executor 2 advised they are in poor health and really struggling with work commitments.

Executor 2 advised they would be off work for two weeks to see health professionals. They managed to allocate a few hours on just three days at the property.

Executor 1 and Executor 2 disputed allocating time to sort through belongings. They agreed on a half hour each day (Monday to Saturday).

COVID restrictions prevented them from attending the property for a period of time.

Executor 2's health was suffering and they were struggling with work commitments. They were unable to help with the estate.

Executor 1 sought three market appraisals on the property.

Executor 1 received the cost agreement for preparing contract of sale and conveyancing.

Executor 2 signed the cost agreement after numerous disputes with Executor 1.

The transfer of title to Executor 1 and Executor 2, as executors, was delayed due to COVID restrictions and delays caused by Executor 2.

The title transferred to Executor 1 and Executor 2, as executors.

The property sold and settled within 16 months of the two-year period.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195