Edited version of private advice

Authorisation Number: 1052173053797

Date of advice: 6 October 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 took into consideration the fact that the deceased's child had a right to occupy the property under the deceased's will. Accordingly, the capital gain (or loss) that the trustee of the estate made from the CGT event that happened in relation to their ownership interest in the property is disregarded under subsection 118-195(1).

Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

XX XX 19XX

Relevant facts and circumstances

The deceased passed away on XX/XX/19XX.

At date of death, the deceased owned a property. The property was the deceased's main residence and was not income producing at any time.

The deceased lived in the property with their child.

The property is situated on less than 2 hectares of land.

The child was given a right to reside in the property, as per the deceased's Will.

The two children of the deceased were appointed joint executors and trustees.

On XX XX 20XX, the deceased's child with the right to reside passed away.

After the passing, the other child became the sole owner of the property.

On XX XX 20XX, the property was sold.

The property settled on XX XX 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195