Edited version of private advice

Authorisation Number: 1052094100913

Date of advice: 6 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 to allow an extension of time for you to dispose of the ownership interest in the property you owned as trustee of the 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:

The income year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The deceased passed away on DD/MM/YYYY.

The deceased inherited the dwelling (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 did not have an ownership interest in any other property at the time of their death.

COVID-19 impacted the trustee and deceased's family's ability to access the property, distribute the deceased's belongings and prepare the property for sale.

Sensitivity of circumstances of surviving relatives of the deceased also delayed the family's ability to prepare the property for sale.

The property was sold at auction, with settlement occurring on DD/MM/YYYY.

The property remained vacant from the deceased's date of death until settlement.

No capital improvements were made to the property from the deceased's date of death until settlement.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195