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Edited version of private advice
Authorisation Number: 1052226116352
Date of advice: 6 March 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 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 ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on DD MM 20YY. A copy of the Death Certificate was provided.
The deceased acquired a dwelling at Location A (the property) jointly with their spouse before 20 September 1985.
The deceased acquired their remaining ownership interest when the property was transferred into their name solely upon the passing of their spouse after 20 September 1985.
The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time.
The property was situated on less than two hectares of land.
The property is the primary asset of the deceased's estate.
The will of the deceased was established on DD MM 20YY, appointing Person A as executor of the estate.
A copy of the will was provided naming Person B, Persson C and Person D as beneficiaries.
The penultimate will of the deceased was dated DD MM 20YY, appointing Person B as executor of the estate.
A copy of the penultimate will was provided naming Person C, Person D, Person B and Person E as beneficiaries.
On DD MM 20YY. Person B lodged a caveat against the making of a grant in respect of the deceased's estate.
On DD MM 20YY, Person A made an application for probate of the will.
On DD MM 20YY, Person B lodged another caveat and on DD MM 20YY, filed amended grounds of objection in the will proceeding, objecting to the making of a grant on the grounds of lack of testamentary capacity, want of knowledge and approval of undue influence.
On DD MM 20YY, Person B passed away and the Court subsequently substituted Person E in the will proceedings.
The court proceedings are continuing.
On DD MM 20YY, Person F was appointed administrator pendente lite for the estate by The Supreme Court of State A. The Court Orders include the following:
3. The grant of administration pendente lite shall confer all the rights and powers of a general administration other than the right to distribute the estate.
This has allowed the appointed administrator to proceed with the sale of the property.
The property was sold on DD MM 20YY, with settlement occurring on DD MM 20YY.
A copy of the signed Contract of Sale of Land was provided which indicates the property was sold by Person F as Administrator for the deceased's estate.
The property has remained vacant between the time the deceased passed away and the time it was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195