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Edited version of private advice
Authorisation Number: 1052093643891
Date of advice: 3 March 2023
Ruling
Subject: Commissioner's discretion - deceased estates
Question
Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) 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 ato.gov.au for 'QC 66057'.
This ruling applies for the following period:
Year End 30 June 20YY
The scheme commenced on:
XX April 20YY
Relevant facts and circumstances
The deceased passed away on XX August 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.
The deceased left his estate to his children equally. They were appointed executors and trustees pursuant to the Will.
A dispute arose between the children as to who should act as executor. One of those children tried to have the another removed as executor.
Additionally, one of those children took up residence in the property.
As part of a settlement of the legal action between the children, a solicitor, was appointed as administrator of the estate and Letters of Administration with Will annexed was granted to them on XX May 20YY
As one of the children refused to leave the property, orders from the Sherriff were obtained and that child was ultimately evicted in November 20XX.
Upon obtaining vacant possession, quite an amount of work had to be done around the property due to its rundown and dirty state. That is, the property had to be brought up to being presentable for sale.
The property was listed for sale in February 20YY. A contract to sell the property was entered into on XX March 20YY with settlement occurring on XX April 20YY.
Relevant legislative provisions
Income Tax Assessment Act 1997 - Subsection 118-195