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Edited version of private advice
Authorisation Number: 1052233661519
Date of advice: 26 March 2024
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise the discretion under section 118-195 of 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 private ruling applies for the following period
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts
The deceased passed away on XX/XX/20XX.
The deceased acquired a dwelling (the dwelling) prior to 20 September 1985.
The deceased resided in an aged care facility with Person A prior to passing away on XX XX 20XX.
Person A passed away on XX XX 20XX.
The dwelling was the main residence of the deceased until they passed away.
The dwelling has never been used to produce assessable income.
The land area is less than 2 hectares in size.
The deceased was survived by a number of beneficiaries. Two of these engaged various legal representatives in relation to the administration of the estate. The dispute arose in XX 20XX and was eventually resolved on XX XX 20XX when a caveat was removed from the title to the dwelling.
The caveat on the title to the dwelling made a potential sale to a purchaser uncertain and was considered an impediment to the sale.
The last Will of the deceased which was stored at the dwelling was also unable to be located and this caused delays in obtaining probate as complex requisitions to the estate were required to be undertaken before the grant of probate issued on XX XX 20XX.
The dwelling was damaged by vandals in xx xx 20xx. The Executor was required to install boarding at the rear of the dwelling to prevent this occurring again. This reduced the appeal of the dwelling to potential purchasers.
The asking price was reduced.
The executor accepted the only offer received and a contract was entered into xx xx 20xx.
The purchaser requested a longer than normal settlement period and this was agreed upon.
Settlement occurred a short time later.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195