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Edited version of private advice
Authorisation Number: 1052188334256
Date of advice: 6 February 2024
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 (ITAA 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.
This ruling applies for the following period:
30 June 20XX
The scheme commenced on:
XX XX 20XX
Relevant facts and circumstances
The deceased passed away on XX XX 20XX.
As at the date of death, the deceased owned the dwelling located at the property.
The deceased acquired the property after 20 September 1985.
The property was situated on less than two hectares of land and was the main residence of the deceased as at the date of their death.
The deceased relocated into an aged care facility in 20XX, and the property was being leased out on a fixed term basis to the tenant.
The deceased left a will appointing the executor of the estate and giving the residue of the estate to the executor and the beneficiaries.
On XX XX 20XX, probate of the estate was granted to the executor.
On XX XX 20XX, the executor received notice that two of the deceased's children (the plaintiff's) had lodged a caveat over the property in anticipation of making a family provision claim against the estate.
On XX XX 20XX, the lease expired. The executor decided to continue the lease on a periodic basis in anticipation of the legal challenge to the estate.
On XX XX 20XX, the plaintiff's lodged a family provision claim in the Supreme Court against the executor.
On XX XX 20XX, the family provision claim was dismissed.
On XX XX 20XX, the caveat was withdrawn, and the certificate of title was transferred into the names of the beneficiaries as tenants in common in equal shares.
The executor experienced delays in getting the caveat withdrawn as the plaintiff's solicitor had ceased acting in XX 20XX.
On XX XX 20XX, the tenant was given notice to vacate the property. Shortly thereafter, the beneficiaries approached a real estate agent to enquire about listing the property for sale.
On XX XX 20XX, the tenant vacated the property, and the beneficiaries entered an agency agreement with the real estate agent to list the property.
During XX 20XX, the beneficiaries arranged for minor repairs to be done to the property.
In XX 20XX, the property was listed for sale.
On XX XX 20XX, the beneficiaries entered a contract for sale of the property with settlement occurring on XX XX 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195