Edited version of private advice

Authorisation Number: 1052180000306

Date of advice: 17 October 2023

Ruling

Subject: CGT - 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 the ownership interest in the dwelling located at Location A (the Property) and disregard the capital gain or capital loss made on the disposal?

Answer

Yes.

Having considered your circumstances and the relevant factors set out in the Practical Compliance Guideline PCG 2019/5, the Commissioner will allow an extension of time to dispose of your ownership interest in the property. Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'.

This private ruling applies for the following period:

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

On DD MM 20XX, the Deceased passed away.

As at the date of death, the Deceased owned the Property.

The Property had been acquired by the Deceased in 19XX and was the Deceased's main residence. The Property was not being used for income producing activities.

The Property was less than two hectares.

The Deceased left a will appointing the Executor as the sole executor and beneficiary of their estate.

On DD MM 20XX the Executor was diagnosed with a health condition. This added to their pre-existing health issues. The Executor had been on the Disability Support Pension since they stopped work in 20XX.

In June 20XX the Executor became aware via a press release in the newspaper that the State Government would be proceeding with plans for a large development near the Property (the Development). The Executor contacted the State Government and was advised that the proposed site of the Development would be revealed later in the year.

On DD MM 20XX the Executor's sibling passed away resulting in a Coronial inquest.

Toward the end of 20XX, the Executor commenced repairs to the Property. It was identified that the carpet was mouldy and the paint, which contained lead, was peeling. The gas stove and gas water heater were replaced as they were leaking. The kitchen and bathroom were renovated and the wooden floors were sanded and polished.

The Executor had no remaining living family to support with the cleaning and repairs to the Property and the Executor's spouse was unable to assist due to ongoing health issues.

In MM 20XX the Executor had surgery.

In MM 20XX the Executor received a letter from the State Government regarding the Development. The letter advised they were in the early stages of formulating a design for the Development.

On DD MM 20XX the Executor developed a health issue which required surgery.

In MM 20XX the Executor's sibling's Coronial inquest began.

In 20XX the Executor continued to seek information from the State Government regarding the impact of the Development to the property.

On DD MM 20XX, the Executor's Solicitor made an application to the State Government for exceptional hardship land purchase, whereby they requested that the Property be compulsorily acquired by the State Government due to exceptional circumstances.

The Executor's solicitor wrote in the application that it was difficult to sell the Property due to the Development. The letter set out that the neighbouring properties on either side had been compulsorily acquired by the State Government.

In MM 20XX the State Government requested further information from the Executor to support their application for compulsorily acquisition. The Executor felt overwhelmed with the process and decided to cease the application and commence repairs on the Property.

In MM 20XX, repairs to the Property were completed. The Executor estimate's that they spent approximately $XX,XXX undertaking work to the Property.

In MM 20XX the Executor's sibling's Coronial hearing commenced.

In MM 20XX the Executor's sibling's Coronial findings were released.

In MM 20XX, the Executor received notification from the State Government advising that they would be undertaking works at the dwelling next door to the property.

On DD MM 20XX the Executor approached a real estate agent regarding the sale of the Property.

On DD MM 20XX the Executor had surgery.

On DD MM 20XX the Property was listed for sale.

On DD MM 20XX the Property was sold for $X,XXX,XXX conditionally.

On DD MM 20XX probate was granted.

On DD MM 20XX settlement occurred on the Property.

The Property remained vacant from the time the deceased passed away until it was sold.