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Edited version of private advice
Authorisation Number: 1052218487733
Date of advice: 5 February 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 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 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 DD/MM/20YY
The scheme commenced on:
DD/MM/20YY
Relevant facts and circumstances
On DD/MM/20YY, XXX (the Deceased) passed away leaving a will (the Will).
The Will appointed XXX as executor (the Executor) and trustee. The Executor and the Deceased's other child (Person A) were the two beneficiaries.
As at date of death, the Deceased owned a property at XXX (the Property). The Property was the main residence of the Deceased and had been acquired on DD/MM19YY.
The Deceased's Will granted a right of occupancy to the Executor for a period of two years from the date of the Deceased's death, subject to the payment of all rates, taxes and outgoings.
On DD/MM/20YY, probate was granted to the Executor.
On DD/MM/20YY, Person A arranged for a letter to be sent to the Executor through their legal representative requesting that the Executor list the Property for sale after the expiry of the occupation period.
On DD/MM/20YY, the Executor sent a letter of reply stating they would not move out of the Property.
On DD/MM/20YY, the two year right of occupancy period expired.
On DD/MM/20YY, a further letter was sent to the Executor requesting them to vacate the property and list it for sale or Person A will commence court proceedings.
On DD/MM/20YY, the Executor sent a letter stating they would not move out of the Property.
On DD/MM/20YY, the Supreme Court of New South Wales issues judgement that probate granted to the Executor by this Court on DD/MM/20YY, be revoked, and that that Letters of Administration with the Will dated DD/MM/20YY annexed, of the Deceased be granted to XXX as the independent administrator of the Will.
On DD/MM/20YY, the independent administrator's application for administration was filed with the Supreme Court and on DD/MM/20YY the administrator received the grant of Letters of Administration
On DD/MM/20YY, a contract of sale was signed for the Property, with settlement occurring on DD/MM/20YY.
At all material times, the Property was not used for producing assessable income.
The Property is less than 2 hectares in size.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195