Edited version of private advice

Authorisation Number: 1052195991836

Date of advice: 23 November 2023

Ruling

Subject: CGT - deceased estate

Question

Will the Commissioner exercise his discretion and extend the two-year time limit in which the Taxpayer could have disposed of the property for the purposes of section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

In XX 20XX the Deceased's parent passed away.

In XX 20XX, the Deceased's sibling based away and left a Will.

The Deceased was the Executor their sibling's Will.

Between XX XX 20XX and XX XX 20XX, the Deceased passed away.

The exact date of death is unknown, as detailed in the death certificate.

The Deceased did not leave a Will.

The Deceased had not obtained probate on their sibling's deceased estate prior to their death.

The Deceased owned a property (the Property) which was acquired after 20 September 1985.

The Property is less than 2 hectares in size.

The Property was the Deceased's main residence at the time of their death and was not used to produce assessable income.

The Deceased had no surviving relatives in Australia.

Genealogists were engaged to identify persons in the COUNTRY XX that may be entitled to the Deceased's estate on intestacy. COUNTRY XX was the Deceased's former home country.

In XX 20XX, the genealogist report was finalised, it identified XX persons entitled on intestacy.

Solicitors took several months to contact each person identified in the genealogist report to obtain consent to administer the estate.

The genealogist report identified one potential beneficiary that had been informally adopted by the Deceased's grandparents and further investigations were required to determine whether a legal adoption had taken place, which would determine entitlement.

On XX XX 20XX, Solicitors filed an application for Letters of Administration in the Supreme Court.

On XX XX 20XX, the Supreme Court issued a Requisition seeking further information and evidence.

On XX XX 20XX, a response to the Requisition was filed, including evidence that the person informally adopted by the Deceased's grandparents had not been legally adopted and thus was not entitled on intestacy.

On XX XX 20XX, the Supreme Court issued a second Requisition regarding the service of noting to the person identified as informally adopted by the Deceased's grandparents.

This second Requisition was ultimately withdrawn.

On XX XX 20XX, Letters of Administration were issued.

The Administrator was then responsible for finalising the estate of the Deceased, in addition to the estates of the Deceased's parent and sibling.

The Deceased had been a hoarder. Personal and household items were evidenced in every room of the Property.

The Administrator was required to search the Property for items of value for sale; and to dispose of remaining items.

Due to disrepair of the property, repairs were completed to the Property, including painting, minor electrical and plumbing repairs and clearing of the overgrown garden.

On XX XX 20XX, the Property was advertised for sale.

On XX XX 20XX, you entered into a Contract for sale.

On XX XX 20XX, settlement occurred on the Property.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195