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Edited version of private advice
Authorisation Number: 1052273619213
Date of advice: 23 July 2024
Ruling
Subject: CGT - 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 the specified date, individual A (A) passes away leaving a Will (Will).
As at time of (A) death they owned a property (the property) situated in Australia, the property is less than 2 hectares in size and was their main residence.
You had resided with (A) for many years, to look after them.
The Will appointed you (individual (B) and your sibling individual (C) as executors and trustees. The Will granted:
• One third of the residue estate to (C)
• Two thirds of the residue estate and life tenancy to you for you looking after your parent.
On the specified date, (C) formally advises your lawyer that they intend to contest the Will.
On the specified date, (C) emails your lawyer advising they do not consent to you applying for probate and will be seeking legal advice.
From month 20XX to month 20XX, the respective lawyers on behalf of you and (C), continue communication to work towards outcome for the market value of the property and grant of probate.
On the specified date, probate is granted to yourself and (C).
On the specified date, (C) lawyer files the claim against the estate.
From month 20XX to month 20XX, the court proceedings commenced and correspondence submitted by your respective lawyers to work towards resolution for the proceeds of the estate.
On the specified date, a mediation was held between both parties and your respective lawyers, where you both agreed to administer the estate in accordance with the Terms of Settlement.
On the specified date, a settlement is reached between you and (C). A condition of the settlement is that you must move out of the property and that (C) transfer their interest in the property to you. At this point you commence proceedings to find and engage a suitable real estate agent.
On the specified date, the property title is transferred into your name, as directed by the Terms of Settlement.
On the specified date, a contract of sale was signed and settlement occurred on XX month 20XX.
At all material times, the property was not used for producing assessable income.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195