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Edited version of private advice
Authorisation Number: 1052204308741
Date of advice: 14 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 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 ending 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.
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.
Probate was granted on DD MM 20YY.
One of the children (Child A) of the deceased has from a young age been diagnosed with an intellectual disability.
The deceased and their spouse were the primary carer of Child A until one of their parents (the spouse of the deceased) passed away. The death of both parents a short time apart impacted the mental health and wellbeing of Child A.
From the time the deceased passed away, Child A was not in a position to vacate the property. There was a risk that moving them from the property without adequate support, or whilst they were unprepared to do so, would result in their suffering harm or further deterioration in her mental health and wellbeing.
Suitable accommodation was located for Child A by some time after. They moved into the accommodation. At this time, the executor engaged a real estate agent to place the property on the market.
Based on professional advice, a transitional period was required to ensure Child A had settled into the new accommodation. During this transitional period, minor repairs and maintenance were attended to on the property.
Some time after, it was determined that Child A has transitioned into the new accommodation and would remain there.
The property was placed on the market in early MM 20YY and was sold on DD MM 20YY. Settlement occurred on DD MM 20YY.
The property was not used to produce assessable income at any time between the date the deceased passed away and when the property was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195