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Edited version of private advice
Authorisation Number: 1052121468173
Date of advice: 26 May 2023
Ruling
Subject: Commissioner's discretion - deceased estate
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 your ownership interest in the dwelling and disregard the capital gain or capital loss you made on the disposal of the dwelling and up to 2 hectares of land?
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 periods:
Year ended 30 June 202X
Year ending 30 June 202X
The scheme commenced on:
1 July 202X
Relevant facts and circumstances
The Deceased passed away on XX/XX/20XX leaving a Will (the Will).
As at the date of death, the Deceased owned a property at XXX (the Property).
The Property is more than 2 hectares with a dwelling on it. The Deceased used the dwelling and land up to 2 hectares as their main residence from the date of acquisition to their death.
The Deceased appointed XXX as Executor of her Will (the Executor).
On XX/XX/20XX, the Executor received the sealed Grant of Probate.
The Will states that the Deceased gives the Property to their three children child 1, child 2 and child 3, upon child 3 attaining the age of XX years.
The Deceased stated in the Will, that it was their express wish that the Trustee retains the Property as an investment of their estate, and a home for child 3 and their guardian in their minority years.
From late 20XX until early 20XX, child 3 and their appointed guardian (child 2) reside at the property.
Directly following this the property was rented out until mid-to-late 20XX, and Child 3 elects to use the absence rule to continue to treat the property as their main residence.
Child 2 and their family resided at the Property from mid-to-late 20XX (directly after the property ceased being rented out) until late in 20XX.
Child 3 attained the age of XX years on XX/XX/20XX.
The Executor was instructed to sell the Property, and a contract on the Property was signed on XX/XX20XX, with settlement occurring on XX/XX/20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195