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Edited version of private advice
Authorisation Number: 1052117128862
Date of advice: 9 June 2023
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise their discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time for you to dispose of your ownership interest in the Property 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 ending XX/XX//20XX.
The scheme commenced on:
XX/XX/20XX
Relevant facts and circumstances
On XX/XX/20XX, the Deceased passed away owning the Property.
The property had been the Deceased's main residence and was not used for the purpose of producing assessable income.
On XX/XX/20XX, probate was granted to the Executors.
By XX/20XX, the relationship between the Executors had broken down significantly. The Executors each engaged their own legal representation, and all communication went via solicitors. In addition to the dispute between the Executors, the Beneficiaries were also in disagreement between themselves and with the Executors.
On XX/XX/20XX, the Executors were advised that an independent Administrator would be required if they could not work together to administer the estate.
Between XX/20XX and XX/20XX, the Executors attempted to resuming the joint instruction of solicitors to administer the estate. At some point during this period, they also discussed one of the Executors purchasing the Property, however these negotiations ultimately broke down.
In XX/20XX, the Executors agreed to file an application for an independent administraton. One of the Executors engaged new legal representation who required time to review the material and prepare relevant court documentation.
In XX/20XX, the Executors agreed to file an application for an independent administrator.
On XX/XX/20XX, the Executors filed a joint application for their removal as Executors and for the appointment of an independent Administrator (the Administrator).
On XX/XX/20XX, orders were made revoking the grant of probate to the Executors and appointing the Administrator.
Upon their appointment, the Administrator commenced arranging for the removing of personal and household items from the Property. This required the Administrator undertaking an in-depth inventory of the personal items, which was complicated by the fact that there were multiple disagreements between the beneficiaries as to how the items should be distributed.
On XX/XX/20XX, the Property was listed for sale.
On XX/XX/20XX, the administered entered a contract of sale for the Property.
On XX/XX/20XX, settlement of the contract occurred.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118 - 195