Edited version of private advice

Authorisation Number: 1052217468949

Date of advice: 24 April 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 your 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 private ruling applies for the following period:

Year ending XX June 20XX

The scheme commenced on:

X July 20XX

Relevant facts and circumstances

The deceased passed away in month 20XX.

The deceased purchased the Property in month 19XX.

The Property was the main residence of the deceased until their passing.

The Property was never used to produce assessable income and is situated on less than 2 hectares of land.

The deceased named the applicant as executor of their Will in 20XX.

A probate application for the Estate of the deceased was filed with the Supreme Court in 20XX.

The applicant's solicitor applied for the grant of probate in 20XX.

The applicant's solicitor incorrectly included the Will of person B in the grant of probate application.

Person B was the deceased's ex-spouse, who passed away in 20XX.

The Supreme Court contacted the applicant's solicitor in 20XX to advise them that they would not consider the application until the original Will of the deceased was filed.

Subsequently, the applicant filed an amended application for grant of probate containing the Will of the deceased.

In 20XX, the applicant's solicitor filed an Affidavit of Executor on behalf of the applicant.

The Affidavit stated that they had inadvertently filed a copy of the Will of the deceased instead of the original.

The Affidavit requested that the application be considered in absence of the original Will of the deceased.

Between May 20XX and March 20XX, both the applicant and their Solicitor contacted the Supreme Court on multiple occasions to request updates on the application.

In 20XX, the applicant's solicitor contacted the Supreme Court advising that the applicant had found the original Will of the deceased; which the applicant subsequently provided to the Court.

The applicant once again contacted the Court later that month to request an update on the delay. A representative of the Court advised the applicant that they did not believe either of the Wills they had provided to the Court were the original Will of the deceased.

The applicant and solicitor subsequently requested an appointment with a Court officer to select one of the Wills to be the one on which basis the grant of probate application would be considered.

In 20XX, the applicant and solicitor attended an appointment with a Court officer of the Supreme Court to approve a version of the Will to include in the probate application.

In 20XX, the applicant lodged a request for the application for grant of probate be expedited as one of the beneficiaries of the Estate had been diagnosed with a terminal illness.

Probate was granted in month 20XX.

The Property was advertised for sale in month 20XX.

In 20XX, the real estate agents lowered the Property price range due to lack of offers to purchase.

In 20XX, an offer was placed on the Property, subject to finance approval.

Finance was not approved and the Property was re-listed for sale in 20XX.

In 20XX, a successful offer was placed on the Property.

Settlement occurred in month 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195