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Edited version of private advice
Authorisation Number: 1051988133010
Date of advice: 31 May 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 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 periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
At some time after 1985, the deceased purchased a newly refurbished property. It was the deceased's main residence until they passed away and was never used to produce income.
The property size is less than two hectares.
The deceased died intestate. The deceased's relative was the only living relative of the deceased who fell within the class of persons described in Division 6 of Part 1A of the Administration and Probate Act 1958.
Shortly after, the deceased's relative, unaware of the deceased's passing, attempted to contact the deceased. They were advised that the deceased passed away several months earlier.
The deceased's relative investigated a claim that the deceased had a de facto partner at the time of their death.
The deceased's relative investigated and contested in the courts the claim by the alleged de facto to the grant of Letters of Administration in respect of the estate of the deceased.
Private mediation was held between both parties in relation to the grant of Letters of Administration in respect of the estate of the deceased.
A Deed of Settlement was signed by both parties.
The deceased's relative applied for a grant of Letters of Administration.
The alleged de facto's application for a grant of Letters of Administration was withdrawn.
The deceased's relative was granted Letters of Administration in respect of the estate of the deceased and commenced the administration of the estate of the deceased.
At some time after the deceased passed away, a roof leak caused damage to the property including water damage to discrete sections of the plaster ceiling and wall, front entrance, and electrical wiring.
COVID 19 lockdown restrictions precluded the deceased's relative from properly inspecting the property and dealing with the significant defects which required attention.
The deceased's relative received professional advice from two different estate agents that the damage to the property created safety issues which rendered it unsaleable until the roof and electrical systems had been fully repaired. Various trades were engaged to quote and carry out the necessary repairs.
The property was sold after the repairs were completed with an agreed settlement date within nine months after the two-year period expired.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195
Administration and Probate Act 1958 Division 6 of Part 1A