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Edited version of private advice
Authorisation Number: 1052293279008
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 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 before 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.
Probate was granted on DD MM 20YY.
Shortly before the deceased passed away, one of their family members was diagnosed with a health issue. Treatment lasted until MM 20YY.
On DD MM 20YY a notice was received from a solicitor representing a family member indicating they intended to challenge the will with the intention of having the will amended. This was ultimately withdrawn in MM 20YY, with no amendments made to the will.
From MM 20YY to MM 20YY, another family member of the deceased was engaged in legal proceedings separate to the administering of the estate.
Due to the state the property is located in being in various stages of lockdown due to the COVID-19 pandemic, the property would not be regularly maintained and prepared for sale.
The property was contracted for sale 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 and the date the property was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195