Edited version of private advice

Authorisation Number: 1052205706874

Date of advice: 18 December 2023

Ruling

Subject: Commissioner's discretion - deceased estates

Question

Will the Commissioner exercise his 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 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 ending XX XXXX 20YY

The scheme commenced on:

XX XXXX 20YY

Relevant facts and circumstances

The deceased acquired an equal share of the interest the Property on XX XXXX 20YY.

The deceased acquired sole ownership of the Property on XX XXXX 20YY.

The deceased passed away between XX XXXX 20YY and XX XXXX 20YY.

The deceased passed away intestate with five beneficiaries to the estate.

On XX XXXX 20YY, the letters of administration were granted to the administrator.

The administrator received limited assistance in regard to the deceased's estate as the other beneficiaries were addressing a separate estate or were unsuitable to take on the requirements of the position.

The administrator encountered difficulty organising the funeral due to the ongoing Covid-19 restrictions.

The administrator's attention was diverted by the caring requirements of three separate children, two of which required unique care for their medical conditions. The administrator's attention was further diverted by the birth of their fourth child during the Covid-19 pandemic.

The administrators' spouse was an owner of a farm which required their spouse's ongoing attention and maintenance. The administrator could only attend to the cleaning of the deceased's Property sparingly as they needed their spouse to attend to the children while they travelled to the Property.

The administrator travelled to the Property various times throughout the ownership period to sort through the deceased's effects and prepare the Property for sale.

The deceased's Property revealed a substantial hoarding situation. The Property was encumbered with various household effects accumulated throughout the deceased's lifetime. The administrator encountered difficulty with cleaning the Property as valuable documents were scattered within the properties various accumulated household effects.

The decluttering process was impeded by the care required to sort through valuable documents hidden within the general household effects of the Property. Further delays were associated with identifying household belongings that were to be passed on to other relatives of the deceased.

The Property remained vacant from the date the deceased passed away until the eventual sale.

The Property was listed for sale on XX XXXX 20YY.

The contract of sale was signed on XX XXXX 20YY with settlement being effectuated on XX XXXX 20YY.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195