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Edited version of private advice
Authorisation Number: 1052112343416
Date of advice: 16 May 2023
Ruling
Subject: Commissioner's discretion - deceased estates
Question
Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 and allow an extension of time to the two-year period?
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 ended 30 June 20XX.
The scheme commenced on:
1 July 20XX.
Relevant facts and circumstances
The Deceased owned a property (the Dwelling).
The Deceased passed away.
The Deceased died intestate (without a will).
The Dwelling was the Deceased's main residence at their time of death and had never been used by them for income producing activities.
The Dwelling is situated on less than two hectares of land.
The Deceased had several adult children. Some of them had passed away with one of them being survived by Person 1 and Person 2. Person 1 and Person 2 were estranged from the rest of the family.
Child D resided in the Dwelling prior to the death of the Deceased and remained in the Dwelling after the Deceased passed away, treating the Dwelling as their main residence.
Child A is the Administrator of the Deceased's estate (the Administrator).
Shortly after the Deceased passed away the Administrator of the Deceased's estate instructed solicitors to find Person 1 and Person 2. The solicitors had trouble finding them.
Once the solicitors found Person 1 and Person 2, they then had trouble convincing them about the potential claim made against the Deceased's estate by Child D.
Letters of Administration were not granted to the Administrator until XX/XX/XXXX.
Person 1 and Person 2 were still reluctant to communicate with solicitors, contributing to further delays to settle the claim and have each beneficiary enter into and sign the Deed of Family Arrangement.
On XX/XX/XXXX the Deed of Family Arrangement was signed by all beneficiaries (the Deed).
As part of the deed, the Dwelling was to be transferred to some of the adult children, including Child D and in lieu of Person 2's entitlement to the estate, Child D was to pay a sum of money to Person 2.
Subsequently, the Dwelling was transferred pursuant to the Deed.
Child D remains in the Dwelling as their main residence.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 118-130
Income Tax Assessment Act 1997 section 118-195