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Edited version of private advice
Authorisation Number: 1052251296227
Date of advice: 16 May 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.
The dwelling is located at XXXX (the property).
The deceased acquired 50% of their share in the property before 20 September 1985, and the remaining 50% share was acquired 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 beneficiaries under the will of the deceased are Person A and Person B. Person A was also appointed the executor of the estate.
Probate was granted on DD MM 20YY.
Person B was residing in the property prior to when the deceased passed away, as he was a carer for the deceased. The beneficiaries agreed to sell the property shortly after probate was granted, however Person B continued to reside in the property and refused to vacate the property to allow the sale to proceed.
Person A has a history of mental health issues. Additionally, the partner of Person A passed away shortly before the passing of the deceased.
A meeting was held between the beneficiaries and the estate solicitors on DD MM 20YY. Person B advised they intended to vacate the property, but never did.
A letter was sent to Person B on DD MM 20YY, giving them a deadline to vacate the property by DD MM 20YY.
In MM 20YY, Person A was diagnosed with a health condition that significantly impacted their ability to engage effectively in the estate settlement process.
A second meeting was held between the beneficiaries and the solicitors on DD MM 20YY where it was agreed Person B would vacate the property by the end of MM 20YY. Person B did not vacate the property after this date has passed.
A letter sent by the estate solicitors to Person B on DD MM 20YY advised that they were in breach of the previous agreement reached and provided notice that they were to vacate the property by no later than DD MM 20YY.
Person A engaged a solicitor to serve a notice on DD MM 20YY. A process server unsuccessfully served the notice on DD MM 20YY. Shortly after, it was discovered that Person B had vacated the property, not informing any of the other parties involved.
A letter was sent by the estate solicitors to Person B on DD MM 20YY regarding removal of items left at the property.
The property was listed for sale on DD MM 20YY. The property was contracted for sale on DD MM 20YY, with settlement occurring on DD MM 20YY.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195