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Edited version of private advice
Authorisation Number: 1052168163968
Date of advice: 13 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 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:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on DD MM CCYY.
The dwelling is located at XXXX (the property).
The deceased acquired the property after 20 September 1985.
The property was the main residence of the deceased just before they passed away and was not used to produce income at that time.
The property was situated on less than two hectares of land.
Probate was granted on DD MM CCYY.
The title of the property was transferred into the name of the client on DD MM CCYY.
Repairs to part of the property were undertaken and completed many months before the expiry of the two year period.
The property was initially listed for sale more than six months before the expiry of the two year period. Upon further inspection, further damage was located. This damage had occurred prior to the deceased passing away.
An insurance claim was lodged (for a policy held by the deceased before their passing) approximately six months before the expiry of the two year period.
The insurance claim was approved on DD MM CCYY.
The contract of sale was entered into on DD MM CCYY (pending completion of the repairs).
The repairs were completed on DD MM CCYY.
Settlement of the property occurred a few months after the expiry of the two year period.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195