Edited version of private advice

Authorisation Number: 1052166251543

Date of advice: 8 September 2023

Ruling

Subject: CGT - Commissioner's discretion - two-year extension

Question 1

Will the Commissioner exercise the discretion 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 exercise the discretion under section 118-195 of the ITAA 1997 to allow an extension of time to dispose of the property. Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'

Question 2

Will the Commissioner exercise the discretion under subsection 99A(2) of the Income Tax Assessment Act 1936 (ITAA 1936) to tax the trustee on estate income under section 99 of the ITAA 1936 from the date of Part IX Administration on DD MM 20XX?

Answer

Yes.

After consideration of the relevant factors, the Commissioner is of the opinion that it would be unreasonable that section 99A of the ITAA 1936 should apply in relation to the trust estate that is administered under Part XI of the Bankruptcy Act 1966. Accordingly, section 99 of the ITAA 1936 will apply.

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 several years ago in the mid-2000s.

The deceased acquired the property before 20 September 1985.

The property was situated on less than two hectares of land.

The property was the deceased's main residence just before they passed away and was not used to produce income at that time.

As the deceased died intestate, no one was validly able to administer the deceased estate.

In mid-to-late 20XX, a creditor obtained an order under Part XI of the Bankruptcy Act for the deceased estate to be administered under that Part and the insolvency practitioner was appointed trustee on this date.

The property had been vacant since the date of death.

Following the insolvency practitioner's appointment as the trustee, they arranged for some minor refurbishments to the property, and following this they then listed for sale as soon as practically possible.

You entered into a contract to sell the property on in late 20XX with settlement occurring in early 20XX.

The Trustee is not aware of any security interest attached to the assets of the deceased estate.

The Trustee is not aware of any loans made or received by the deceased estate.

No other assets have been transferred to the deceased estate as no one has been appointed to administer the deceased estate, and the Trustee is not aware of any of such assets.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 118-195

Income Tax Assessment Act 1936 Section 99A

Income Tax Assessment Act 1936 subsection 99A(2)

Income Tax Assessment Act 1936 paragraph 99A(2)(c)