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Edited version of private advice
Authorisation Number: 1052255002074
Date of advice: 23 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 property is located at XXXX (the property).
The deceased acquired 50% of their share in the property before 20 September 1985, and acquired the remaining 50% share 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.
Per the will of the deceased, the property was bequeathed equally to their children, Person A and Person B. The property title was transferred into their names.
The will also granted Person B a life interest in the property with the condition they were allowed to reside in the property rent free until Person B married, chose to dispose of their share of the property, or elected to vacate the property.
On DD MM 20YY Person B advised Person A they wished to purchase Person A's 50% share of the property; thus Person B would become the sole owner of the property.
A deed of family arrangement was signed on DD MM 20YY to transfer Person A's 50% share of the property to Person B.
Settlement occurred on DD MM 20YY.
The property has been occupied by Person B since the deceased passed away and has not been used to produce assessable income.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195