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Edited version of private advice
Authorisation Number: 1052195218385
Date of advice: 23 November 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 dwellings 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 period:
Year ended XX/XX/20XX
The scheme commenced on:
XX/XX/20XX
Relevant facts and circumstances
The deceased (the Deceased) passed away on XX/XX/20XX leaving a will (the Will).
As at date of death, the Deceased owned a dwelling at XXX (Property 1), which was their main residence, and a dwelling at XXX (Property 2) that was rented out.
Property 1 was purchased in 19XX and Property 2 in 19XX and are Pre-CGT assets.
The Deceased's main residence was never used to produce assessable income.
The Deceased's spouse was the sole beneficiary and legal personal representative (the LPR).
In XX/20XX, the Deceased travelled overseas and got married.
Over the next few years, the Deceased regularly visited his spouse overseas, but maintained his permanent home in Australia.
The Deceased was not an Excluded Foreign Resident at time of death.
Due to COVID 19 restrictions, the borders into Australia were closed until XX/XX/20XX, and as the LPR
was a foreign resident they were unable to enter the country.
During this time the LPR did attempt to progress the sale of the properties, but they were living in an area of the overseas country with poor internet connection, and it was two days of travel time to a major city to gain access to internet.
The LPR applied for a VISA immediately upon the borders into Australia re-opening, which was granted in XX/20XX, and they arrived in Australia on XX/XX/20XX.
Shortly after arrival, on XX/XX/20XX, a contract of sale was signed for Property 1 and settlement occurred on XX/XX/20XX.
A couple of months later, on XX/XX/20XX, a contract of sale was signed for Property 2 and settlement occurred on XX/XX/20XX.
Both properties are less than 2 hectares in size.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195