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Edited version of private advice
Authorisation Number: 1052225664555
Date of advice: 23 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 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 2023
The scheme commenced on:
1 July 2022
Relevant facts and circumstances
The deceased passed away several years ago.
The deceased owned a property which was their main residence for the whole of their ownership period.
The deceased purchased the property a number of years.
The property was less than 2 hectares.
The property was never used to produce assessable income.
The reasons for the delay in selling the property are:
• The deceased passed away without a Will.
• Letters of administration were granted to the Public Trustee a couple of years ago.
• The deceased's relative and next of kin who lives in Country Z contacted the Public Trustee in the month following the date of death asking for assistance in administering the estate.
• There was some difficulty in locating a beneficiary overseas who had also passed away.
• The sale of the property was enforced by the District Council as there were outstanding council rates resulting in the property being placed on the market a couple of years after the date of death.
• The property came close to being sold a year after the property was placed on the market however the contract fell through.
• The property is located in a remote area, there is a limited market for the sale of property in this region and the subsequent sale was also affected by COVID restrictions.
The property was sold by the District Council on behalf of the Public Trustee and the proceeds were deposited with the public trustee.
The property sold a couple of years after being placed on the market.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195