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Edited version of private advice
Authorisation Number: 1052069585082
Date of advice: 13 December 2022
Ruling
Subject: CGT - deceased estates
Question
Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time for you to dispose of your ownership interest in the dwelling acquired from a deceased estate 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 periods:
The income year ended 30 June 20XX
The income year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on DD/MM/YYY.
The deceased purchased the dwelling on the property (the property) before 20 September 1985.
The property was situated on less than two hectares of land.
The property was the deceased's main residence until their date of death.
The deceased's three children were appointed as executors of the deceased's estate (the executors). They were also the beneficiaries of the deceased's estate.
Child 1 resides overseas.
COVID-19 restrictions commenced in March 2020.
Due to Child 1 residing overseas, delays were experienced in the obtainment of probate of the deceased's will.
Probate of the deceased's will was subsequently granted.
The executors were all within a high-risk group for COVID-19.
The travel restrictions imposed during the COVID-19 lockdown periods impacted Child 2 and Child 3's ability to travel to the residence and organise its clean up.
There were also restrictions on real estate activities imposed due to COVID-19. During COVID-19 lockdown periods, public auctions and inspections were banned and only virtual versions were allowed to proceed.
Due to COVID-19 travel restrictions, Child 1 was delayed from returning to Australia.
Child 1's spouse was also severely immune compromised and required extra care during the relevant period.
When COVID-19 restrictions and case numbers eased, Child 1 travelled to the locality of the property to organise the property for sale.
A contract to dispose of the property was entered into a short time after Child 1 returned to Australia, with settlement occurring on DD/MM/YYY.
The property remained vacant from the deceased's date of death until settlement.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195