Edited version of private advice

Authorisation Number: 1052291972977

Date of advice: 9 September 2024

Ruling

Subject: CGT - disposal of assets

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 property 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 XX June 20XX

The scheme commenced on:

XX July 20XX

Relevant facts and circumstances

After 19 September 1985, the Deceased acquired the property.

The property size is under X hectares.

The deceased lived in the property as their main residence at their date of death and the property was never used to produce assessable income.

Executor A, the deceased's solicitor, was named as the Executor to the deceased Will, dated

XX XXXX 20XX (the original Will).

On XX XXXX 20XX:

•                     Executor A attended the deceased's home to draft their requested amendments to their Will (the new Will). The new Will had multiple handwritten amendments which disinherited several of the beneficiaries of the original will.

•                     Executor A witnessed the handwritten amendments.

•                     Executor B was appointed as another Executor under the new Will.

Executor A was unable to execute the new Will as the deceased was admitted to hospital, where the medical practitioners determined a lack of capacity.

On X XXXX 20XX, the deceased passed away.

In XXXX 20XX, disgruntled beneficiaries questioned the capacity of the deceased at the time of the deceased making the new Will, and whether the new Will should be provided to the Court for probate purposes.

Solicitors ultimately determined that the deceased had the capacity at the time of the handmade amendments, and that probate would be applied for in respect of the new Will.

In XXXX 20XX, Executor A resigned from the Legal Firm and the new solicitor, took over the file. The new solicitor only worked X days per week.

The new solicitor liaised with the Estate Planners, whom had management of the deceased's affairs prior to his death.

The new solicitor conducted tasks such as redirecting mail and obtaining approval for garden maintenance required on the house.

In early 20XX, the new solicitor contacted the relevant beneficiaries of the new Will.

On XX XXXX 20XX, the new solicitor applied for probate of the new Will.

From XX XXXX 20XX to XX XXXX 20XX, the new solicitor made many unsuccessful attempts to contact Executor B.

In XXXX 20XX, the new solicitor contacted Executor B's previous employer who provided updated contact details for Executor B.

On XX XXXX 20XX, Executor B responded to the new Solicitor.

Contacting the other beneficiaries took several months, as some of the beneficiaries were listed as 'children of' the various parties, and not specifically named in the new Will.

The new solicitor identified and contacted the beneficiaries of the new Will.

On XX XXX 20XX and XX XXXX 20XX respectively, Executor A and Executor B attended the Legal Firm and renounced probate.

Under the new Will, the back-up executors were the partners of the Legal Firm at the date of the deceased's death, which were Executor C, Executor D, Executor E, Executor F and Executor G.

In 20XX, Executor F and Executor G advised they no longer worked at the Legal Firm and did not wish to be executors.

Executor C and Executor D (the executors of the new Will) agreed to act as executors as they were still working for the Legal firm.

On X XXXX 20XX, executors of the new Will applied for Probate.

On XX XXXX 20XX, the Court rejected the Probate application.

On XX XXXX 20XX, executors of the new Will applied for Probate for a second time.

On XX XXXX 20XX, the Court granted Probate to the executors of the new Will.

On XX XXXX 20XX, the executors of the new Will contacted Estate Agent A regarding the sale of the property.

On XX XXXX 20XX, the executors of the new Will signed the sales agency agreement.

Works commenced to bring the property up to a saleable condition and address any safety issues. Due to the house being uninhabited for some time, this included:

•                     On XX XXXX 20XX, repainted ceilings, patched holes, and painted walls.

•                     On XX XXXX 20XX, installed X new ceiling fans.

•                     On XX XXXX 20XX, installed new carpet in some of the bedrooms.

•                     On XX XXXX 20XX, delivery styling and collection of items.

•                     Replaced curtains and blinds and tidied the house.

The house was immediately listed for sale when the works were completed.

On XX XXXX 20XX, the property sold at auction.

On XX XXXX 20XX, the sale of the property settled.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 118-195