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Edited version of private advice
Authorisation Number: 1052198804141
Date of advice: 30 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 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 period:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
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. There were no capital improvements during the ownership period.
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 is situated on less than two hectares of land.
You commenced as executors of the estate on DD MM 20XX.
An application for a Grant of Probate was lodged on DD MM 20YY.
On DD MM 20YY, you were requisitioned by the court for not including a Medical Capacity Affidavit, as one was required due to the listed cause of death on the Death Certificate. Therefore, a Testamentary Capacity Affidavit was needed to apply for a Grant of Probate.
You made several attempts to locate the doctor of the deceased, locating them on DD MM 20YY. They confirmed they were willing to sign the Medical Capacity Affidavit.
On DD MM 20YY, you sent the draft Medical Affidavit to the doctor of the deceased for them to sign. On DD MM 20YY, the deceased's doctor contacted you to request an amendment to the Medical Affidavit.
On DD MM 20YY the redrafted Medical Affidavit was sent to the deceased's doctor to be signed. The signed Medical Affidavit was signed and received by you on DD MM 20YY.
Shortly after, you received the Grant of Probate.
You engaged a real estate agent to sell the property.
The property was sold on DD MM 20YY, with settlement occurring on DD MM 20YY, a couple of months outside of the two-year period.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195