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Edited version of private advice
Authorisation Number: 1052081442820
Date of advice: 30 January 2023
Ruling
Subject: Commissioner's discretion - deceased estates
Question
Will the Commissioner exercise the discretion under section 118-195 of ITAA 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 period:
Year ended 30 June 20YY
The scheme commences on:
XX Month 20YY
Relevant facts and circumstances
The deceased passed away on XX Month 20YY.
The dwelling is located at a place (the property).
The deceased acquired the property after 20 September 1985.
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.
Probate was granted on XX Month 20YY.
The deceased made and duly executed their last Will and testament bearing date XX Month 20YY. No grant of probate of such Will had been obtained. On XX Month 20YY, the Deputy Registrar of Probates of the Court directed that letters of administration be granted to the Public Trustee. On receipt of grant, Public Trustee started formal administration of the estate of the deceased.
The delay in selling the property was primarily on account of the grant of administration given to Public Trustee after 2 years from the date of death.
As soon as practicable, steps were taken to list the property for sale for the purpose of distribution of funds to the sole beneficiary who is living overseas. The property was listed on XX Month 20YY. Marketing the property at the remote location was very difficult and it took a while to find a buyer
A contract was signed on XX Month 20YY to sell the property with settlement occurring on XX Month 20YY.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195