Edited version of private advice

Authorisation Number: 1052084224133

Date of advice: 6 February 2023

Ruling

Subject: 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 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 'QC 66057' on ato.gov.au.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The deceased owned a property that was acquired after 1985.

The deceased passed away intestate in December 20XX.

The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at the time of death.

The property was situated on less than two hectares of land.

The property was vacant from the date the deceased passed away until it was sold.

The estate experienced ongoing legal and administration issues from February 20XX until August 20XX.

In February 20XX, the solicitors of the deceased's spouse received a notice that a child of the deceased had attempted to obtain Letters of Administration without authority.

A caveat was lodged at the probate registry to protect the deceased's spouses' interest in the estate as the administrator.

From February to May 20XX, the solicitors representing the deceased's spouse had been in discussions with the solicitors representing the deceased's' child to obtain documents which included the death certificate and details of assets held in relation to the estate.

The deceased's childs' solicitors were difficult to contact during this time.

The documents were received in May 20XX; however, it was identified the death certificate was required to be amended due to the deceased's marriage not being recognised on the certificate.

The amendment of the death certificate required correspondence and documentation to be supplied. This process took from May 20XX to February 20XX.

Covid-19 lockdowns slowed this process, and it was difficult to obtain sufficient documentation and arrange identification for the deceased's spouse.

A marriage certificate needed to be obtained to amend the original death certificate.

The death certificate was issued in February 20XX.

Probate was granted in April 20XX.

Following the grant of probate, the estate commenced, and the deceased's child advised they wished to purchase the property from the estate.

The deceased's child solicitors commenced organising a valuation of the property to proceed with the sale.

Due to Covid-19 lockdowns, the valuation was delayed for several months and was completed in November 20XX.

The deceased's child changed solicitors and following the valuation advised the solicitors for the estate that he would not be proceeding with the purchase of the property.

Part IV proceedings were commenced by children of the deceased and were served in October 20XX.

Following the proceedings, the sale of the property was put on hold and mediation was scheduled to take place in May 20XX.

Additional children of the estate were located and a Part IV claim to the estate was lodged.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195