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Edited version of private advice
Authorisation Number: 1052108945346
Date of advice: 18 April 2023
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) in relation to the dwelling on the property and allow an extension of time to sell the property?
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 ending 30 June 20xx
The scheme commenced on:
1 July 20xx
Relevant facts and circumstances
The deceased passed away more than XX years ago.
The deceased owned a property with a dwelling.
The deceased acquired the property sometime after 1985 and continued to treat the property as her main residence until her passing.
The property is less than two hectares in size.
The deceased and the deceased's former spouse had been permanently separated since sometime prior to the deceased purchasing her residence.
The deceased's Will (the Will) provided the deceased's the former spouse an explicit right to use and occupy the property.
The Will explicitly forbade the Executor from selling the property prior to the death of the deceased's former spouse.
The deceased's former spouse never resided in the property, but did not give up the rights over the property which would allow it to be sold prior to their death.
The Will specified that the proceeds from the sale of the property were to be distributed between the deceased's two children.
The deceased's former spouse passed away some years later, at which time the right of occupancy was extinguished. The Executor immediately sought a grant of probate on the deceased's estate, which was granted within a matter of months.
At the time of the deceased's former spouse's passing, one of the grandchildren of the deceased was residing in the property rent-free under a family arrangement. The Executor had some difficulty arranging for this individual to vacate the property, and had to institute eviction proceedings against him.
The Executor was also faced with claims on the deceased's estate from the grandchildren of the deceased. Until these claims were resolved, the property was unable to be sold.
The property was sold within a matter of months after these claims had been resolved.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195