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Edited version of private advice
Authorisation Number: 1052163312143
Date of advice: 31 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 to dispose of the ownership interest in the dwelling and disregard the capital gain 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 ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away a few years ago.
The deceased lived at the property as their main residence up until they passed away.
The property was acquired by the deceased when they inherited it from their late spouse.
The property was never used to produce income.
The property was less than 2 hectares.
The deceased's children were executors and beneficiaries of the deceased's estate.
The property is the primary asset of the deceased's estate.
Probate was granted a couple of months after the date of death.
Individual Z had been living with the deceased prior to their death to care for them and Individual Z continued to live in the property after the date of death.
Individual Z was not given a right to occupy the property under the Will.
Individual Z did not pay any rent on the property.
The Executors disagreed over the administration of the estate and sale of the property.
An Executor sought legal advice after attempts to progress the sale of the property with Individual Z
In several months after Probate was granted an Executor initiated legal proceedings to remove Individual Z as an executor and requested to remain as the sole executor.
The legal dispute led to a trial, but on the day of trial, the parties' Counsel advised the Court that they had resolved the dispute, subject to the appointment of an independent Administrator.
The Administrator was appointed as the Administrator by a Court Order several months later.
The property was soon sold and settled in the following year on XX/XX/20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195