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Edited version of private advice
Authorisation Number: 1052148117662
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 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
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:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away in 20XX.
The deceased owned a property (the property).
The deceased acquired the property prior to 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.
Probate was granted in 20XX.
The executors decided to sell the property as soon as possible, however Covid-19 lockdowns impacted the property being prepared for sale during 20XX.
In between Covid-19 lockdown periods, one of the executors of the estate began clearing the property.
As the deceased had resided in the property for several years, many effects had been accumulated within the house, crawl space and garage. It took the executor some time to remove the items and tidy the property.
The property contained several heavy items, each weighing between X kg-X kg. Many people were required to assist with lifting and removing these items.
In 20XX, the executors held meetings with prospective real estate agents.
In 20XX, a real estate agent was appointed.
In 20XX, the property sold at auction and the initial bidder provided a small deposit and requested a 100-day settlement period.
The purchaser was unable to complete the purchase of the property within the timeframe outlined in the contract of sale and the property was then placed back on the market.
You entered a contract to sell the property in 20XX with settlement occurring in
20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195