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Edited version of private advice
Authorisation Number: 1052154887119
Date of advice: 14 August 2023
Ruling
Subject: CGT - deceased estate
Question
Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act (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:
Income Year ended DD MM 20YY
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
The deceased passed away on DD MM 20YY, leaving a will (the Will).
The deceased acquired the property on DD MM 20YY.
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.
After the deceased's passing, the administration of the estate was delayed due to an erroneous spelling of the Executor's name in the Will, and the complexities in locating the Executor.
The Executor of the Will and beneficiary of the property was the biological child of the deceased.
There was no contact between the deceased and the Executor who was adopted into a different family between their birth in 19YY and DD MM 19YY, when the Executor was X years old.
When the Executor was made aware of their ownership interest on or around DD MM 20YY, steps were taken to address legislative issues and apply for Grant of Probate. Probate was granted a few months after the Executor had been located.
The property was listed for sale soon after the legal proceedings were finalised. The Executor entered into a contract to sell the property on DD MM 20YY with settlement occurring on DD MM 20YY.
The property was vacant from the deceased's death until settlement.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195