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Edited version of private advice
Authorisation Number: 1052297880429
Date of advice: 28 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.
The Will of the deceased provided one of their children (Person A) with a lifetime interest to occupy the property. Person A passed away on DD MM 20YY.
At the time Person A passed away, another child of the deceased (Person B) was residing in the property to provide care for Person A. Person B continued to reside in the property, as their own home required repairs. The executors of the estate all agreed to allow Person B to remain in the property until such time that works were completed on their own property.
In MM 20YY1, Person C expressed interest in purchasing the property from the estate.
In MM 20YY, the property was damaged by a natural disaster and deemed uninhabitable. Person B left the property at that time. Following their departure, restoration work was performed to the property.
Following the completion of the restoration work, Person C occupied the property from MM 20YY until they purchased the property from the estate in MM 20YY. The contract date for sale was DD MM 20YY.
The property was not used to generate assessable income at any time between the date the deceased passed away until the property was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195