Edited version of private advice

Authorisation Number: 1052144180367

Date of advice: 26 July 2023

Ruling

Subject: Commissioner's discretion - deceased estate

Question

Will the Commissioner exercise the discretion under section 118-195 of 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

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:

XX/MM/CCYY

The scheme commenced on:

XX/MM/CCYY

Relevant facts and circumstances

The deceased passed away on XX/MM/CCYY.

The dwelling is located at a State/Territory in Australia (the property).

The deceased acquired the property after 20 September 1985.

The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time.

The property was situated on less than two hectares of land.

There was a codicil to the will that stated that the deceased's pet will be cared for at the property until they die. It also stated that the deceased's spouse, child, and their spouse shall continue to live at the property to care for the pet. After the death of the pet, the deceased's spouse will notify the trustee and the property should be sold.

The pet passed away on XX/MM/CCYY. Upon this, the process began to settle the Estate.

The original Executor passed away before the pet. Another Executor was appointed, and they were provided with an envelope containing the estate information including the will and a certified copy of the codicil. The original codicil could not be found, and a certified copy was not enough to get through probate.

In order to complete the process, the Executor and the solicitor had to locate the named witnesses and have them sign an affidavit to coincide with the codicil. Locating the witnesses became difficult as they were not local to the deceased's area or known to any family members. The witnesses were acquaintances who happened to drop in for a visit to the deceased's home when the documents needed signing.

Once the Executor had the affidavits from the witnesses, the next step was to locate the preparer of the codicil. However, this person was not known and after lengthy investigation, could not be determined.

The Executor was also living in another location which made liaising with the other parties even more difficult.

An application for probate on certified copy of codicil was finally lodged on XX/MM/CCYY. This application was accepted by Order of the Court on XX/MM/CCYY, and probate was granted on XX/MM/CCYY.

The property was listed for sale on XX/MM/CCYY.

A contract was entered into to sell the property on XX/MM/CCYY with settlement occurring on XX/MM/CCYY.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 118-195