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Edited version of private advice
Authorisation Number: 1052227341535
Date of advice: 1 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 (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. However, the extension only extends to the dwelling and the land to the extent that the land was used primarily for private and domestic purposes in association with the dwelling, up to a maximum area of 2 hectares.
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 XX XXXX 20YY
The scheme commenced on:
XX XXXX 20YY
Relevant facts and circumstances
The deceased passed away on XX XXXX 20YY.
The deceased owned a property.
The will of the deceased dated appointed Person 1 as the executor.
On YY XXXX 20YY, a law firm was instructed to act for the executor.
From XX XXXX 20YY to XX XXXX 20YY, delays occurred due to the process of identification of the deceased's assets and obtaining valuations.
On XX XXXX 20YY, Probate was granted by the Supreme Court of the relevant State.
In XXXX or XXXX of 20YY, the executor and Person 2 engaged a second law firm for advice concerning a potential claim against the Estate.
On XX XXXX 20YY, a claim was filed in the Supreme Court of the relevant state by the executor and Person 2 which challenged the Will due to a dispute with Person 3 concerning whether the property formed part of the residue of the Estate.
On XX XXXX 20YY, the property was transferred to the executor.
On XX XXXX 20YY, the judicial registrar made orders by consent that the parties to the proceeding attend mediation.
On XX XXXX 20YY, mediation was held with the parties reaching a settlement and release to sell the property.
On XX XXXX 20YY, the executor engaged a real estate agent, and the property was listed for sale by auction.
On XX XXXX 20YY, the executor provided a listing contract and vendor statement to the real estate agent.
On XX XXXX 20YY, the auction of the property was unsuccessful.
On XX XXXX 20YY, the executor received sales instructions from the real estate agent.
On XX XXXX 20YY, an updated contract of sale and vendor statement was sent to the purchaser's solicitors for signing.
On XX XXXX 20YY, contract of sale of the property was executed.
On XX XXXX 20YY, settlement of sale of the property was effectuated.
The property was vacant from the date of the deceased's death until it was sold.
The size of the land exceeds 2 hectares.
The dwelling was the main residence of the deceased just before their death.
The property was not used for the purpose of producing assessable income at the time of the deceased's death.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195