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Edited version of private advice
Authorisation Number: 1052127807210
Date of advice: 9 June 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 (ITAA 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?
Answer
Generally, repairs to the deceased's property that were undertaken to improve the condition it was in at the time of their death would not be a factor favourable to exercising the Commissioner's discretion. However, having considered all of your circumstances in their entirety 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 private ruling applies for the following period
Year ending XX/XX/20XX
The scheme commenced on:
XX/XX/20XX
Relevant facts
The Deceased passed away on XX/XX/20XX.
The Deceased owned the Dwelling which was acquired prior to 20 September 1985 and located on less than 2 hectares of land.
On XX/XX/20XX, probate was granted to the Executors.
The Executors were elderly and suffered serious health issues which prevented them at times from attending to the estate administration process and hindered their ability to prepare the Dwelling for sale.
The Executors attended to bringing the Dwelling to a saleable state. The bathroom had been gutted prior to the Deceased death and mould had built up on the walls in the kitchen and dining rooms. The Executors arranged for the bathroom to be brought to a functional state and the walls to be treated and painted. The efforts of the Executors were hindered by an ability to source tradespersons during the COVID-19 pandemic.
The Dwelling was sold as soon as practicably possible with settlement occurring on XX/XX/20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195