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Edited version of private advice
Authorisation Number: 1052215924511
Date of advice: 25 January 2024
Ruling
Subject: Capital
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 ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away several years ago.
The deceased purchased the property a number of years ago.
The property was less than 2 hectares.
The property was never used to produce assessable income.
The property was the deceased's main residence just prior to their death.
Probate was granted to the estate a few years ago.
The deceased entered respite care days prior to their death.
The property remained vacant until it was sold.
Individual Z is the executor of the estate.
Individual Z was a friend of the deceased.
Individual Z lives a few hours away from the deceased's home.
Individual Z and their spouse cleaned up the property for sale.
Individual Z, during the same period, was having ongoing minor surgery.
Individual Z sought the assistance of a friend and a friend of the deceased to assist with looking after the property and collecting the mail.
Individual Z was also undertaking part-time work at the same time.
The property needed some repairs carried out, including replacement of carpets along with some plumbing and electrical work.
The property needed to be cleaned up both inside and outside.
Covid impacted the ability to be able to engage trades people to the property and this delayed being able to put the property on the market.
The property was listed for sale a few years after the date of death and an offer was made on the property shortly after.
Settlement was then delayed a number of times due to the purchaser's work schedule and their request to have new locks throughout the property and the reinstatement of the alarm system which had been disabled prior to the deceased passing.
Settlement occurred in the following month.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195