Edited version of private advice

Authorisation Number: 1052075761050

Date of advice: 9 January 2023

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 'QC 66057' on ato.gov.au.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

The deceased owned a property that was acquired prior to 1985.

The deceased passed away in February 20XX.

The property was the main residence of the deceased just before they 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 specified that the estate was to be divided amongst a number of beneficiaries.

In March 20XX, the executor of the estate received quotes for the estate.

In April 20XX, an external agency advised that lawyers were appointed to represent one of the beneficiaries.

In May 20XX, the executor engaged with a lawyer to commence the probate process.

In September 20XX, probate documents were submitted by the executor's lawyer.

In September 20XX, the Probate Registrar advised that the application was invalid and further action was required.

In December 20XX, the relevant parties agreed that a deed was required for probate to be granted.

In December 20XX, the executor requested that the matter be followed up on.

In December 20XX, a lawyer from an external agency requested the financial details of all parties be provided for a reassessment of Will distribution.

In January 20XX, the external agency requested that the draft deed be reviewed.

In June 20XX, the relevant parties agreed to the conditions included in the deed.

In November 20XX, the executor's lawyer advised that the process of engaging with the external agency regarding the deed was slow.

In December 20XX, the executor's lawyer and the external agency altered the current deed.

In January 20XX, the executor's lawyer had a change of case staff.

In March 20XX, the executor's lawyer issued a letter advising of the delays associated with the deed.

The executor ended their engagement with their lawyer in June 20XX after the process had stalled.

The executor engaged with a second lawyer in September 20XX to submit probate and review the deed.

In December 20XX, the executor's second lawyer advised that the legal costs associated with the deed were approved.

In March 20XX, the relevant parties involved agreed to sign the draft deed.

In May 20XX, the executor was waiting on the external agency to execute the final deed.

In June 20XX, the external agency issued the deed to be signed.

Following the deed being issued, the external agency noticed errors in the deed.

In July 20XX, a new deed was issued.

In August 20XX, other items were observed to be missing in the deed.

In December 20XX, the external agency provided legal costs.

In February 20XX, the relevant parties signed the final deed.

In April 20XX, the executor's second lawyer issued a follow up email regarding affidavits and an application to court.

In July 20XX, the executor's second lawyer was having issues with the Probate Registrar and the court seeking orders for deed.

In November 20XX, a second probate application was agreed to be lodged.

Probate was granted in January 20XX.

The executor received notification that probate had been granted in January 20XX.

Following probate being granted, the property was cleaned and prepared for sale.

In May 20XX, an agent was engaged to sell the property.

A contract was entered into to sell the property in July 20XX with settlement occurring in October 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 118-195(1)