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Edited version of private advice
Authorisation Number: 1052273211600
Date of advice: 11 July 2024
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise the discretion under section 118-195 of theIncome 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 ended 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 the property 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.
At the time the deceased passed away, the state of State A was in a fluctuating state of lockdown due to the COVID-19 pandemic. This made obtaining the will for the deceased difficult, as the law firm that held the will of the deceased could not be attended until sometime later.
At the time the deceased passed away, not all their children (and siblings of the executor) were on speaking terms due to familial disagreements. They provided no assistance to estate matters, or remediation of the property to prepare it for sale.
Prior to the deceased passing away, one of their children (Child A) moved into the property with the deceased to receive assistance with their medical conditions.
After the deceased passed away, Child A continued to reside at the property while attempting to locate alternate accommodation.
In late 20YY another of the children of the deceased had a medical illness that inhibited their assisting with estate matters.
In early 20YY discussions were held between the siblings regarding sale of the property. It was determined that funds would be required to prepare the property for sale. At that time, none of the siblings had these funds readily available.
Once the required amount of money to prepare the property was available, the property was prepared for presentation and real estate market placement.
The contract of sale was entered into on DD MM 20YY, with settlement occurring on DD MM 20YY.
The property was not used to produce assessable income at any time between the date the deceased passed away until the date the property was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195