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Edited version of private advice
Authorisation Number: 1052200588523
Date of advice: 12 December 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 (ITAA 1997) to allow an extension of time for the executors of the deceased estate to dispose of the dwelling and disregard the capital gain made on the disposal?
Answer
Yes.
Having considered the 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 leaving an estate containing a residential property.
The deceased acquired the property after 20 September 1985.
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 was situated on less than two hectares of land.
Executors were appointed to administer the estate of the deceased in accordance with the will.
The executors lived interstate from the property and government restrictions on travel due to the COVID-19 pandemic impacted the executor's ability to attend to the property and progress its sale.
A number of other sensitive personal circumstances that were outside of the executors' control also prevented the estate from being administered within two years.
Probate was granted to the executors on XX month XXXX.
The property was listed for sale within six months of probate being granted.
The contract for sale was executed around two months after the property was listed for sale.
Settlement of the property occurred eight weeks after the contract was executed.
The total duration between the deceased's date of death and settlement of the property was less than three years.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195