Edited version of private advice

Authorisation Number: 1052269312983

Date of advice: 16 July 2024

Ruling

Subject: Commissioner discretion - deceased estate

Question

Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 (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 ruling applies for the following period:

Year ended DD/MM/20YY

The scheme commenced on:

DD/MM/20YY

Relevant facts and circumstances

On DD/MM/19YY, the deceased passed away leaving a will (the will).

As at date of death, the deceased owned a property at XXX, which was their main residence.

The will named Person A as executor and trustee.

The will granted a life occupancy to one of the deceased's children (Child A).

Child A lived in the property from the deceased's date of death until they passed away.

On DD/MM/19YY, Probate was granted to Person A as the named executor in the will.

On DD/MM/20YY, Child A passed away.

On DD/MM/20YY, another of the deceased's children (Child B) and the named executor Person A entered into a 'Deed of Retirement and Appointment of Trustee' and Child B became the new trustee.

In MM/20YY, Child B engaged real estate agents to place the property on the market.

On DD/MM/20YY, a contract of sale for the property was signed, and a few weeks later settlement occurred.

At all material times, the property was not used for producing assessable income.

The property is less than 2 hectares in size.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195