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Edited version of private advice
Authorisation Number: 1052118757792
Date of advice: 22 May 2023
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise the discretion under section 118-195 of Income Tax Assessment Act 1997 (ITAA) 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 June 20XX
The scheme commenced on:
XX July 20XX
Relevant facts and circumstances
The Deceased acquired the Property prior to XX/19XX.
The Deceased passed away on XX/XX/20XX.
The Property was the main residence of the Deceased throughout their ownership period until XX prior to their death at which time, the Deceased moved into a nursing home.
The Deceased appointed the Executor and the Reserve Executor as the Executor's of her Will.
Probate was granted to the Executor with leave reserved to the Reserve Executor on XX/XX/20XX.
The Executor attended to performing general repairs, cleaning, gardening and decluttering of the Property. This involved arranging for interstate beneficiaries to inspect and collect the Deceased's items.
The Property was listed for sale on XX/XX/20XX.
COVID-19 restrictions negatively impacted the Executor's ability to advertise the Property and arrange inspections for potential buyers.
The Executor passed away suddenly on XX/XX/20XX.
The Reserve Executor was prevented from continuing the administration of the Estate because of a caveat lodged against the Will of the Executor on XX/XX/20XX.
Probate was granted to the Reserve Executor on XX/XX/20XX.
The Reserve Executor attended to decluttering and cleaning the Property in preparation for sale.
The Reserve Executor entered a contract for sale of the Property on XX/XX/20XX.
Settlement occurred on XX/XX/20XX.
The property had not been used to produce income and was situated on less than two hectares.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-195(1)