| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1052131027040
Date of advice: 25 July 2023
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
Will the Commissioner allow an extension of time for you to dispose of the 50% ownership interest, which you acquired from Person A, in the Property and disregard the capital gain or 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 means you can disregard the capital gain or loss you made on the disposal of this ownership interest in the Property.
Question 2
Is the Commissioner's discretion required to allow an extension of time for you to dispose of the 50% ownership interest, which you acquired from Person B, in the Property?
Answer
No. This is because the 50% ownership interest you acquired from Person B was sold and settled within 2 years of his date of death. This means you can disregard the capital gain or loss you made on the disposal of this ownership interest in the Property.
This ruling applies for the following period
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
Person A and Person B co-owned the Property in equal shares as tenants in common.
The Property was acquired prior to 20 September 1985 and it is less than 2 hectares in size.
The Property was the main residence of Person A and Person B.
The Property has never been used to produce income.
Person A passed away on DD MM 19XX. Person A granted their 50% ownership interest in the Property to you. You were co-executor of their deceased estate. Person A granted a life tenancy to Person B, being the right to use, occupy and enjoy that half share during their life.
You could not dispose of your interest in the Property prior to Person B's passing, because Person B had a 50% ownership interest in the Property and the life tenancy granted under Person A's Will. Consequently, your ownership interest in the Property did not end within 2 years of the passing of Person A.
Person B continued to reside at the Property until they moved into aged care in 20XX.
Person B passed away on DD MM 20XX.
Person B's Will granted his 50 % ownership interest in the Property to you.
On DD MM 20XX, Probate for Person B's deceased estate was granted. You were co-executor of your Person B's estate. Upon the granting of probate, Person B's 50 % ownership interest in the Property, passed to you as beneficiary.
The Property was sold privately.
The contract of sale attributable to the 50% ownership interest you acquired from Person B was entered into on DD MM 20XX.
The contract of sale attributable to the 50% ownership interest you acquired from Person A was entered into on DD MM 20XX.
Settlement occurred on DD MM 20XX for the 50% ownership interest you acquired from Person B.
Settlement occurred on DD MM 20XX for the 50% ownership interest you acquired from Person A.
Relevant legislative provision
Income Tax Assessment Act 1997 section 118-195