Edited version of private advice

Authorisation Number: 1052084027305

Date of advice: 10 February 2023

Ruling

Subject: CGT - 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 private ruling applies for the following period

Year ending 30 June 20XX

The scheme commenced

1 July 20XX

Relevant facts

The deceased acquired a property prior to 20 September 1985. (The property)

The land area is less than 2 hectares.

The deceased passed away on XX XXX 19XX. (The deceased)

The property was the deceased's main residence for the whole duration of their ownership period until the date of death.

The dwelling has not been used to produce assessable income.

Probate of the will of the deceased was granted to person A on XX XXX 19XX.

Person B and Person C replaced Person A as trustees of the estate on XX XXX 20XX after Person A retired as Trustee.

Person D replaced Person B as Trustee of the estate on XX XXX 20XX after person B retired as Trustee.

Person E replaced person D as Trustee of the estate on XX XXX 20XX, after person D retired as trustee.

On XX XXX 19XX, person A was registered on the title to the property as legal personal representative of the deceased.

On XX XXX 20XX, Person B and Person C and were registered on the title to the property as legal personal representative of the deceased.

On XX XXX 20XX, person D and person E were registered on the title to the property as legal personal representatives of the deceased.

Pursuant to the Will, the deceased's friends, person F and person G (collectively life tenants) were granted a life interest in the property. They occupied the property pursuant to the life interest in the will from the date of death of the deceased, paying all outgoings and expenses in connection with the property until;

•         XX XXX 2XXX for person F being their date of death: and

•         XX XXX 2XXX for person G, being their date of death.

Following the death of person G, the trustees arranged for the sale of property, pursuant to the Will, for the benefit of the residuary beneficiaries named in the will. A contract for the sale of the property was signed by the trustees as legal personal representatives of the estate of the deceased on XX XXX 20XX.

Between XX XXX 20XX and the sale of the property, there were no refurbishments, renovations or significant works carried out on the property.

The dwelling was prepared for sale and placed on the market for sale.

Settlement for the sale occurred a short time later.

Relevant legislative provisions

Income Tax Assessment Act 1997 subdivision 115-A

Income Tax Assessment Act 1997 section 102-20

Income Tax Assessment Act 1997 section 104-10

Income Tax Assessment Act 1997 section 118-120

Income Tax Assessment Act 1997 section 118-130

Income Tax Assessment Act 1997 section 118-195