Edited version of private advice

Authorisation Number: 1052267396438

Date of advice: 27 June 2024

Ruling

Subject: Commissioner's discretion - deceased estates

Question

Will the Commissioner exercise the discretion under section 118-195 of 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?

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

The Decease bought the property on XX XXXX 20YY.

The Deceased passed away on XX XXXX 20YY.

The Will of the Deceased appointed Person 1 and Person 2 as executors of the estate ('the Executors').

Person 3 is a beneficiary under the Will of the Deceased. Person 3 was living with the Deceased prior to their passing and continued to live in the property until XX XXXX 20YY.

The Executors stated to Person 3 that they were allowed to live in the property for a period of X months after the Deceased's passing to allow time for them to find alternative accommodation.

On XX XXXX 20YY, Court A issued a Grant of Probate to the Executors.

On XX XXXX 20YY, Person 3 filed an application to the Court B seeking further provision from the estate with an affidavit in support of their claim.

On XX XXXX 20YY, the Executors filed a Notice of Address for Service.

From XX XXXX 20YY to XX XXXX 20YY, various affidavits were submitted to progress the dispute.

On XX XXXX 20YY, the parties attempted a mediation without a successful outcome.

Between XXXX 20YY and XXXX 20YY, the dispute with Person 3 continued. The Executors encountered difficulties administering the estate as they were elderly and struggled with technology and collection of the estate's assets.

In early 20YY, Person 2 suffered a stroke and Person 1 shifted their focus to acting as a full-time career.

In XXXX 20YY, Person 4 and Person 5, children of the Deceased received confirmation that Person 1 and

Person 2 would consent to their removal as Executors of the estate. Person 4 and Person 5 instructed legal representation to prepare an application for a grant of administration. Person 3 did not consent to this application.

In XXXX 20YY, Person 4 and Person 5 signed the required documents and a consent order to be appointed administrators.

On XX XXXX 20YY, the Executors signed the consent order removing them and appointing Person 4 and

Person 5 as the Administrators ('the Administrators').

On XX XXXX 20YY, legal representatives of the estate filed the application to appoint the Administrators.

On XX XXXX 20YY, Court A issued a Grant of Letters of Administration to the Administrators.

From XXXX 20YY to XX XXXX 20YY, legal representation of the estate encountered delays clarifying the estate's assets and obtaining information from the Executors. Person 3's legal representation was in frequent discussions with the Estates legal representation pursuing resolution of the matter.

On XX XXXX 20YY, Person 3 obtained new legal representation who contacted the estate's legal representation. As the assets of the estate were not yet clarified, Person 3 refused to vacate the property.

In XXXX 20YY, the assets and liabilities of the estate were confirmed. The parties agreed a date for mediation and shared further affidavit material.

In XXXX 20YY, the parties filed affidavits.

On XX XXXX 20YY, Court B ordered the Will be amended in accordance with the agreement reached by the parties at mediation.

On XX XXXX 20YY, Person 3 vacated the property so it could be sold, and the proceeds of sale distributed in accordance with the Deed of Settlement.

The Administrators prepared the property for sale and consulted real estate agents.

The Administrators listed the property for sale, accepted an offer and signed a contract of sale on XX XXXX 20YY.

The sale of the property settled on XX XXXX 20YY.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 118-195