Edited version of private advice

Authorisation Number: 1052212295664

Date of advice: 17 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 (ITAA 1997) to allow an extension of time to dispose of the ownership interest in the property (the Property) and disregard the capital gain 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 a number of years ago.

The deceased purchased a property.

The deceased lived at the property as their main residence until they passed away.

The property was less than 2 hectares in size.

The property was never used to produce assessable income.

The deceased's Will gave their friend the right to reside in the property during their lifetime.

The deceased's friend passed away several years after the deceased.

Delays in selling the property were encountered as access to the property was hindered until probate was given to administer the Will and the Public Trustee was able to facilitate identifying what items belonged to the deceased and which items belonged to their friend. Probate for their friend's estate was granted a number of years after the deceased's date of death.

The sale contract for the property was signed in the year after Probate was granted for the friend's estate and settlement occurred in the following month.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195