Edited version of private advice

Authorisation Number: 1052207936147

Date of advice: 5 January 2024

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 thecapital 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 202X

The scheme commenced on:

1 July 202X

Relevant facts and circumstances

The deceased passed away on XX XX 20XX.

At date of death, the deceased was the sole owner of a property.

The property was the main residence of the deceased and their spouse.

The property's land area is less than 2 hectares.

The deceased acquired the property after 20 September 1985.

In their Will, the deceased left a life interest to their spouse, who was also responsible for the maintenance of the property.

The spouse continued to live in the property until they passed away.

Following the spouse's passing, the executors discovered that the property had not been maintained, and there was a significant amount of work necessary to make it habitable.

The executors made a claim against the spouse's Estate for expenses owing in relation to the occupation of the property.

The parties agreed to a settlement, and upon receipt of the settlement funds, engaged in property repairs required to make the property saleable.

During the ownership period, many generations worth of belongings and possessions were accumulated in the property. Due to the volume of contents in the property and the deteriorated state of some items, a significant clean out was required before the repairs process could begin.

There was also an infestation throughout the property. After everything was removed, an extensive clean and pest treatment was conducted.

Various repairs were conducted on the property from XX 20XX to XX 20XX.

Multiple tradespeople were required to conduct this work, which proved difficult due to the property being in a remote area, with limited tradespeople to select from.

The executors personally carried out as many repairs, however their efforts were hampered due to their own personal health issues or work and caring responsibilities.

Upon completion of the necessary repairs and replacements, the property was marketed and sold, with settlement taking place on XX XX 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195