Edited version of private advice

Authorisation Number: 1052230514302

Date of advice: 8 March 2024

Ruling

Subject: Deceased estate - Commissioner's discretion

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 ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The deceased passed away on XX/XX/20XX.

The deceased owned a property (the property) that was acquired before 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 or any time after their death.

The property was situated on less than two hectares of land.

The deceased's will, dated XX/XX/20XX directed that their entire estate be bequeathed to their spouse (the deceased's spouse).

The deceased's spouse passed away on XX/XX/20XX.

The property was the deceased's spouse's main residence just before they passed away and was not used to produce assessable income at that time or any time after their death.

The property title was not transferred into the deceased's spouse's name due to a Grant of Representation being required and the cost of doing so would have resulted in hardship for the deceased's spouse.

The deceased's spouse had continued to make repayments on the loan for the property until the loan was paid in full.

In 20XX, the deceased's spouse attempted to transfer the title of the property into their name without a Grant of Representation, however this was unsuccessful.

On XX/XX/20XX, the family of the deceased's spouse contacted the State Trustees Limited to administer the estate.

On XX/XX/20XX, following the completion of investigations and reviews, the estate of the deceased's spouse was allocated to a consultant within the State Trustees Limited.

On XX/XX/20XX, a notice of intention was advertised.

On XX/XX/20XX, Probate for the deceased was granted.

On XX/XX/20XX, a grant application was lodged with the Supreme Court.

On XX/XX/20XX, Probate for the deceased's spouse was granted.

On XX/XX/20XX, a conveyancing team within the State Trustees Limited were engaged to attend to issues with the title as it was in the name of Organisation One.

Between XX/20XX and XX/20XX, the State Trustees Limited obtained the documentation that was required to resolve the issues with the property's title.

On XX/XX/20XX, the issue surrounding the title were resolved and the State Trustees Limited commenced the process of clearing the property.

On XX/XX/20XX, Organisation Two were given authority to sell the property.

The property remained vacant after the deceased's spouse passed away.

The property was in poor condition and some cleaning and gardening occurred prior to the property being listed for sale.

A contract was entered into to sell the property on XX/XX/20XX with settlement occurring on XX/XX/20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 118-195