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Edited version of private advice
Authorisation Number: 1052129962870
Date of advice: 21 June 2023
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
Will the Commissioner exercise the discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time to dispose of the main residence and up to 2 hectares at the Property and disregard the capital gain or loss 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'.
Question 2
Will the Commissioner exercise the discretion under subsection 152-80(3) of the ITAA 1997 to allow an extension of time to dispose of the farm at the Property in relation to the small business capital gains tax (CGT) concessions to XX/XX/20XX?
Answer
Yes.
After taking into consideration your relevant circumstances, including the fact that the administration of the Deceased's estate was complicated from the delay in the issue of probate and transfer of the title to the beneficiaries, the restricted travel during the COVID-19 pandemic, and the claim against the estate, the Commissioner will allow an extension of time to apply any available small business CGT concessions to XX/XX/20XX.
This ruling applies for the following periods:
Financial year ending XX/XX/20XX
Financial year ending XX/XX/20XX
Financial year ending XX/XX/20XX
The scheme commenced on:
XX/XX/20XX
Relevant facts and circumstances
The Deceased passed away on XX/XX/20XX.
As at the date of death, the Deceased owned the Property.
The Deceased acquired the Property prior to 20 September 1985.
The Property was the main residence of the Deceased just before they passed away.
The Property was situated on XXX hectares of land.
The Property was not used for XXX but had XXX conducted on it.
Probate was granted to the Executor on XX/XX/20XX.
Shortly thereafter, a claim was lodged against the Executor. This claim was disallowed on XX/XX/20XX.
The Executor transferred the title of the Property to the beneficiaries on XX/XX/20XX.
Only one beneficiary was in a position to attend to preparing the Property for sale due to the geographical location of the other beneficiaries. Preparing the Property for sale involved clearing plant and equipment, including XXX, that had been accumulating on the Property for nearly XX years. The Beneficiary's efforts were restricted by caring responsibilities and COVID-19 travel restrictions.
The Property sold on XX/XX/20XX with settlement occurring on XX/XX/20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997, subsection 118-195(1)
Income Tax Assessment Act 1997, subsection 152-80(3)