Edited version of private advice

Authorisation Number: 1052161257236

Date of advice: 29 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 997 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 of the property?

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, XX XX, passed away on XX XX 20XX.

The property at XX XX XX, XX XX (the property) was the deceased's main residence at the time of death and never used to produce income.

The property is less than two hectares.

The deceased's will gave the property to their children in equal shares.

One of the deceased's children has always resided at the property and continues to reside at the property.

The executor, one of the children, has a learning disability and experienced sensitive health and personal legal issues which exacerbated their ability to administer the estate.

Probate was granted on XX XX 20XX.

The beneficiaries agreed to vary their entitlement to the estate under the deceased's will through a Deed of Family Arrangement executed on XX XX 20XX.

Under the Deed, one of the beneficiaries essentially purchased a sibling's interest in the property.

Transfer of the ownership interests from the estate to the children in accordance with the Deed occurred on XX XX 20XX, X months outside of the 2 year period.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195