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Edited version of private advice
Authorisation Number: 1051990131304
Date of advice: 3 June 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 dwelling and disregard the capital gain or loss you made on the disposal pursuant to section 118-195 of the Income Tax Assessment Act 1997?
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:
Income year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away in early 20XX (Summer).
The deceased acquired the property after 20 September 1985.
The property was the main residence of the deceased throughout their ownership period.
The property has never been used to produce assessable income.
Probate was granted in Winter 20XX.
In Winter 20XX, the executor also began searching for the original title to the property but could not locate it. In Summer 20XX, it was deemed necessary to make a lost title application.
In early 20XX, work began on the lost title application. Delays attributable to the imposition of the COVID 19 lockdown in the relevant capital city, including the inability to access premises to search records, prolonged the process.
The new title was issued in Spring 20XX.
The executor of the estate, who was a child of the deceased, then made enquiries with a real estate agent regarding the value of the property and potential sale. The executor determined to sell to their stepchild around Autumn 20XX.
Due to selling to their stepchild, the executor would need informed consent from the other beneficiary, who resided overseas. Discussions occurred between Winter 20XX and Spring 20XX, with a signed consent to sale received from the other beneficiary in Spring 20XX.
The executor entered into a contract to sell the property in Spring 20XX, with settlement occurring in Summer 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195