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Edited version of private advice
Authorisation Number: 1052230544879
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 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 XX XXXX 20YY
The scheme commenced on:
XX XXXX 20YY
Relevant facts and circumstances
In XXXX, the property was purchased (the Property).
The Property was purchased after 20 September 1985.
The address of the Property where the dwelling is located is XXX.
The Property is XXXm2 in size.
On XX XXXX 20YY, the Deceased passed away
The Deceased died intestate.
The Property was the Deceased's main residence.
The Property was not used at any time to produce assessable income.
The Deceased had two siblings (the Parties): Person A and Person B.
On XXXX, the Parties took the estate to Law Firm A.
On XX XXXX 20YY, Person B wanted their own lawyer and hired Lawyer A.
On XXXX, Law Firm A sent administration papers to Lawyer A for signing however Person B refused to sign them.
On XXXX, Lawyer A terminated their engagement with Person B.
On XXXX, Person B approached Law Firm B, but they refused to represent them.
On XX XXXX 20YY, Person B approached Law Firm C.
On XXXX, Law Firm A sent administration papers to be signed but Person B refused to sign them.
Person B wanted to keep the Property for themselves.
On XX XXXX 20YY, Person B advised Law Firm C that they had changed the locks to the Property to prevent access by anyone but themselves.
Between XX XXXX 20YY to XX XXXX 20YY, Law Firm A sent several administration papers to Law Firm C to be signed.
Person B refused to sign these papers during this period.
On XX XXXX 20YY, Law Firm C ceased to represent Person B.
In XXXX and XXXX, Person A approached the Public Trustees of XXXX to handle the estate.
The Public Trustees of XXXX could not handle the case because Person B was unwilling to cooperate.
From XX XXXX 20YY to XX XXXX 20YY, Person A went to the court multiple times to get a citation to get Person B to wind up the estate.
Each time an affidavit was completed and delivered by a sheriff, but Person B refused to cooperate.
XX XXXX 20YY, Law Firm A received approval from the court inviting Person B to join Person A for administration.
Person B did not reply to this.
Between XX XXXX 20YY to XX XXXX 20YY, Law Firm A applied for approval for Person A to act solely in administration of estate.
On XX XXXX 20YY, the court granted approval.
Between XX XXXX 20YY to XX XXXX 20YY, Person A cleaned the property.
On XX XXXX 20YY, contract was signed.
On XX XXXX 20YY, the Property settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195