Edited version of private advice

Authorisation Number: 1051993002839

Date of advice: 17 June 2022

Ruling

Subject: Commissioner's discretion - deceased estate

Question

Will the Commissioner exercise the discretion to 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?

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:

Year ended 30 June 20XX.

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

Sometime ago Z and their spouse purchased a dwelling.

The dwelling is situated on less than two hectares of land.

The dwelling was their main residence from the time the dwelling was purchased.

Z's spouse passed away.

Shortly after Z's spouse passed away you were appointed administrator of Z's affairs.

Z continued to treat the dwelling as their main residence after the death of their spouse.

A few months after the passing of their spouse Z moved into a nursing home.

After Z moved into the nursing home the dwelling was rented out for approximately two years. After it became vacant again it remained vacant until sold.

Approximately two years after Z moved into a nursing home Z passed away (the deceased).

Shortly after the deceased passed away you located a copy of the deceased's Will.

The copy of the deceased's Will was dated many years before the deceased and their spouse purchased the dwelling (the copy of deceased's Will).

The copy of the deceased's Will appointed relatives of the deceased - one deceased and one living - as executors and trustees of the deceased's estate (the executor).

You contacted the executor, to ascertain if they possessed the original Will of the deceased and to verify who was named as the surviving executor/s in the deceased's Will.

The legal firm who made the Will confirmed that they do not hold the original Will.

The executor obtained legal advice regarding the Will. The advice received stated that the Will appears incomplete.

You confirmed to the executor that you would not pursue proving the incomplete copy of the Will. The executor was advised to seek legal advice.

It was later discovered that a more legible copy of the Will had been taken from the deceased's dwelling and delivered to the deceased at their nursing home, which at some point in time was delivered to you.

The Will document discovered still appeared to be incomplete.

You made additional inquiries to locate the complete document.

You took undertook further actions to arrange supporting material to accompany the application for a grant of Probate.

Covid lockdown restrictions during 2020 and 2021 also contributed to the delays in obtaining necessary information for the application for grant of the Probate of the Will.

You contacted the executor regarding the administration of the estate. The executor advised that they were entitled to be an executor appointed by the Will. However, they would authorise you to administer the estate.

The executor signed the authority to legally authorise you to commence the full estate administration for the deceased's estate.

In order to confirm if the Will was incomplete, you required one of the witnesses in the Will to sign an Affidavit of Due Execution of Witness in order to prove the Will to the Supreme Court and obtain Probate.

Approximately three years after the deceased passed away you lodged an Application for Grant of Probate.

You were granted probate of the deceased's Will.

A short time after you were granted probate the dwelling was sold, and settlement occurred on the dwelling.

You, as the trustee of the deceased's estate, choose to apply the absence choice in regard to the dwelling while the deceased was in the nursing home until their date of death.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 104-10

Income Tax Assessment Act 1997 section 118-130

Income Tax Assessment Act 1997 section 118-145

Income Tax Assessment Act 1997 section 118-195