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Edited version of private advice
Authorisation Number: 1052170709918
Date of advice: 20 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 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 deceased acquired with their spouse as joint tenants, the property at XX XX XXX XX XX (the property) in 19XX.
The property is less than 2 hectares.
The deceased resided at the property with their spouse, XX XX.
The deceased moved to a nursing home in XX 20XX until they passed away.
The absence rule has been chosen to continue to treat the property as the deceased's main residence for the period they lived in the nursing home.
The deceased's will gave all of their estate to their child, XX XX XX.
Before their death, the deceased had filed an application to change ownership of the property from joint tenants between them and their spouse to tenants in common. At the time of their death the application had not been finalised and upon their passing the property title was transferred to the spouse, XX XX.
The matter was taken to court and was settled in the Family Court of the relevant State by way of consent orders issued on XX XX 20XX.
The orders directed the deceased's spouse, XX XX, to transfer a XX% interest in the property to the Legal Personal Representative of the deceased's estate, as tenants in common, with the stipulation that the spouse retain the right to occupy the property until either their permanent move to a care facility or their death. The property was then to be sold.
The deceased's spouse moved to permanent residential care in late 20XX.
The property was sold, and settlement occurred on XX XX 20XX.
The property was never used to produce income by the deceased or their estate.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195