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Edited version of private advice
Authorisation Number: 1052167752149
Date of advice: 18 September 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 to allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard thecapital gain or capital loss you made on the disposal?
Answer
Yes. In considering whether to extend the 2-year period, we weigh up all of the factors (both favourable and adverse) having regard to the facts and circumstances of the case. The delay attributed to waiting for the beneficiaries to advise the Trustee of what actions they wished to take would be seen as an unfavourable factor. However, the right to reside, and the repairs required to rectify the damage to the property that occurred after the deceased's death, would be seen as favourable factors.
As the unfavourable factor highlighted had a minor impact in comparison to the favourable factors, we considered it appropriate to 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:
XX XX 20XX
Relevant facts and circumstances
The deceased passed away on XX XX 20XX.
At date of death, the deceased owned a property. The property was the deceased's main residence and was not used for income producing purposes at any time, either by the deceased before their death or by their estate.
The Trustee has made the absence choice for the period when the deceased moved out of the dwelling and into the nursing home.
The property is situated on less than 2 hectares of land.
A number of factors contributed to a delay in the sale of the property:
• The initial period of delay was due to a person who had a right to occupy under the will, residing in the property.
• After the deceased's death, and thereafter the death of the person with a right to occupy, an incident occurred at the property which caused damage that required some repairs to the property.
• After the repairs were completed there was a period where the Trustee waited for the beneficiaries to decide if they wished to sell the property.
Approximately xx years and xx months after the deceased's death, the sale of the property was settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195