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Edited version of private advice
Authorisation Number: 1052033874067
Date of advice: 16 September 2022
Ruling
Subject: CGT - 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 property and disregard the capital gain or capital 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 commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased bought the property before 1985.
The deceased passed away after 1985. At this time, the deceased and their spouse owned the property equally as tenants in common. It was their main residence just before the deceased passed away and was not used to produce assessable income at that time.
The property was situated on less than two hectares of land.
The deceased's will (the will):
• appointed executors
• gave the deceased's spouse a life interest (the life interest) in the property
• directed that the deceased's children, have the deceased's X% interest in the property on the ending of the spouse's life interest.
Later there were discussions between the deceased's spouse, the executors, and the deceased's children on the possible sale of the property and end of the life interest. This could only lead to an arrangement if all parties agreed. X of the parties was not prepared to enter into any agreement that would disturb the will.
Later, that party changed their mind. Discussions to sell the property resumed and the parties sought legal advice to prepare an agreement to progress the sale of the property.
Later, the property was listed for sale.
The executors entered into a contract to sell the property with settlement occurring a few years after the end of the two-year period.
After the deceased's death, the property had only ever been used by the deceased's spouse and it was not used to derived assessable income.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195