Edited version of private advice

Authorisation Number: 1051985907807

Date of advice: 25 May 2022

Ruling

Subject: Commissioner's discretion - deceased estate

Question

Will the Commissioner allow an extension of time for the client to dispose of their ownership interest in the dwelling so they can disregard any capital gain they 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 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 commences on:

10 September 2020

Relevant facts and circumstances

The Deceased owned a dwelling at Property XXX (the Dwelling). The Dwelling was purchased in 19XX and the Deceased inherited the Dwelling when the partner died on XX July 19XX.

The property is less than 2 hectares.

The Deceased lived in the Dwelling as the main residence. The Deceased passed away on XX September 20XX.

The Deceased's grandchild, Person A was appointed the Administrator of The Estate after a family dispute with the Deceased's child, Person B.

In 20XX, The Deceased's child moved the Deceased from State XX to a nursing home in the city that he was living in. The Deceased's child did not notify the Deceased's grandchildren when The Deceased passed away in September 20XX. They became aware four months later in January 20XX.

The Deceased's grandchild was living overseas in Country XX up until May 20XX when she moved to State XX. During this period, the estate needed to be put on hold for a few months while the grandchildren were grieving and attending to funeral arrangements.

The Administrator moved back to Australia in May 20XX and over 20XX-20XX.

September 20XX a caveat was placed on the will preventing any action for six months. The caveat was placed on the will to protect the integrity of the will for all beneficiaries, while the grandchildren sought legal advice and pursued options to fulfill the Deceased wishes by appointing an Administrator.

The grandchildren proposed to the Deceased's child that an independent executor be appointed to move forward the Estate and the Deceased's child responded at the end of November 20XX that he would like to be co-administrator, to which The Deceased's grandchild's solicitor told the Deceased's child's solicitor that she was living in Australia again. The Deceased's grandchild's solicitor then proposed that the Deceased's child take on joint administrator with the Deceased's grandchild. The Deceased grandchild's solicitor did not receive a reply through the Deceased's child's solicitor until March 20XX to confirm that he agreed to proceed as joint administrator with the Deceased's grandchild.

Over 20XX-20XX the Deceased's grandchildren initiated communication with the Deceased's child to move forward the estate. Responses from the Deceased's child were either delayed or there was no response to requests for information required to make decisions about moving forward the estate.

From early 20XX until October 20XX the Deceased's grandchildren requested for Deceased's child to provide the information that was required in order to lodge an application for joint administration between Deceased's child and one of the grandchildren. The Deceased's child did not provide the required information.

Between March and August 20XX, the Deceased's solicitor attempted to obtain the required information from the Deceased's child's solicitor in order to make the application as co-administrator. The solicitor communicated that if the information was not provided within 14 days as of 14 August 20XX they would proceed with the application to the court independently in order to move forward proceedings. No communication had been received from The Deceased's child's solicitor by October 20XX.

By October 20XX the Administrator notified the Deceased's child on behalf of the three grandchildren that they will be going ahead independently as Administrator to avoid further delay with moving forward the Deceased's estate.

Further delays in executing the will and finalising the estate were exacerbated by the COVID-19 pandemic and the associated travel ban to State XX from State XX, as well as extended times being unable to leave State XX due to government health orders.

In December 20XX, the application for probate was lodged and in March 20XX, the grant of Letter of Administration was granted by Public Trustees.

One month later, The Administrator proceeded to move forward the Deceased's estate and wishes, which included coordinating with all beneficiaries, and clearing out the Deceased's property in April 20XX ready for sale.

The Dwelling was sold at auction on XX July 20XX.

The sale of the Dwelling settled on XX August 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 104-10

Income Tax Assessment Act 1997 section 118-195