Edited version of private advice

Authorisation Number: 1052152073051

Date of advice: 7 August 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 property 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:

Period ended DD MM 20XX

The scheme commenced on:

DD MM 20XX

Relevant facts and circumstances

The deceased passed away on DD MM 20XX.

As at the date of the death, the deceased owned the property and occupied it as their main residence.

The deceased acquired the property post 20 September 1985.

The property was under 2 hectares.

The property was not being used to produce assessable income as at the date of death.

The deceased left a will appointing the executor as executor of the estate.

As at the date of death, the executor lived in State A. Given that the property was located in State B, the executor's efforts to prepare the property for sale were negatively impacted by government mandated border closures and other COVID-19 restrictions. The executor's ability to travel to State B were also hindered by their caring responsibilities for minor children, spouse's regular travel for work, and personal work commitments.

On DD MM 20XX, the executor obtained probate of the will.

From XX to DD MM 20XX, the executor travelled to State B to commence the process of sorting through the deceased' paperwork, engaging a gardener, and attending to the finalisation of the deceased's accounts and liabilities.

In MM 20XX, the executor travelled to State B to attend to preparing the property for sale. This involved collecting and sorting through the extensive collection of personal items owned by the deceased and engaging rubbish removalists to assist with the disposal of contents. Efforts were hampered by the fact that most contractors were closed during this period.

From MM 20XX to MM 20XX, the executor's ability to travel to State B were hampered by their caring responsibilities and work commitments. This was further complicated by the fact that there were limited flights available and no travel insurance coverage for COVID-19.

From XX to MM 20XX, State B (and at times State A) borders were closed intermittently due to COVID-19 measures.

In MM 20XX, the executor travelled to State B by vehicle which required undertaking three days quarantine. Again, the executor attended to sorting through household items and arranging for donations to charity however their efforts were hampered due to the holiday period.

From XX to MM 20XX, the executor was unable to travel at various times due to several occasions of being a close contact of a person infected with COVID-19, caring responsibilities, and work commitments.

In MM 20XX, the executor travelled to State B to attend to preparing the property for sale.

In MM 20XX, the executor travelled to State B to attend to preparing the property for sale. The executor spoke with real estate agents and requested an appraisal of the property.

In MM 20XX, the executor travelled to State B to finalise preparations of the property for sale. The executor engaged a real estate agent to sell the property and attend to final preparations in their absence which included minor repairs, a final clean and disposal of furniture.

In MM 20XX, the real estate agent attended to the final tasks required to prepare the property for sale.

On DD MM 20XX, the executor entered a contract for sale of the property with settlement occurring on DD MM 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195