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Edited version of private advice
Authorisation Number: 1052292987361
Date of advice: 20 August 2024
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise the discretion under section 118-195 of the 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 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 XXXX
The scheme commenced on:
1 July XXXX
Relevant facts and circumstances
The deceased acquired the residential the property pre - CGT. The deceased passed away on DD MM YY.
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, one of their children also resided at the property.
The last Will by the deceased appointed:
• Appointed Executors of their estate.
• X of the X children are to be provided an equal share of the estate.
• The final share was to be held upon a discretionary trust for their child, with funds to be added from time to time to support their living requirements for their lifetime.
On DD MM YY, an agreement was signed between the siblings to support the last Will by the deceased as follows:
• The house is to remain in the registered names of the Executors until the date the property is sold.
• One sibling to reside at the property for as long as they require, due to needing a home to live in and requires the assistance of their siblings during their lifetime.
On DD MM YY, the sibling entered respite care and became a permanent resident on DD MM YY.
On DD MM YY, the Executors met with real estate agents to list the property for sale, they were provided a list of necessary works required to be performed to the property to make the house compliant for sale.
Between the specified dates:
• Various family members attended the property to clear the property for sale.
• Essential work conducted to the property.
The property was placed on the market on DD MM YY, with settlement occurring on DD MM YY.
The property has not been used to produce assessable income at any time between the date the deceased passed away and the date the property was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195