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Edited version of private advice
Authorisation Number: 1052173934420
Date of advice: 29 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 periods:
Year ended 30 June 20YY
Year ending 30 June 20YY
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
The deceased passed away on DD MM 20YY.
The dwelling is located at XXXX (the property).
The deceased acquired the property before 20 September 1985.
The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time.
The property was situated on less than two hectares of land.
The administrator retained the services of a legal practitioners to assist with obtaining a letter of administration.
In MM 20YY a probate caveat was lodged by a family member (Family Member B).
Another family member expressed their intention to purchase the property from the estate (Family Member C).
On DD MM 20YY the probate caveat was withdrawn by Family Member B.
Letters of Administration were granted on DD MM 20YY.
Subsequently, Family Member C advised they were not able to purchase the property. The administrator offered to purchase the property instead.
The contract of sale was signed on DD MM 20YY for the administrator to purchase 2/3rds of the property (the remaining 1/3 was inherited by the administrator as an inter-vivos distribution).
Settlement occurred on DD MM 20YY.
The property was not used to produce income at any time after the deceased passed away.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195