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Edited version of private advice
Authorisation Number: 1052308693650
Date of advice: 26 September 2024
Ruling
Subject: 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 periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on DD MM 20YY.
The property was located at XXXX (the property).
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.
The deceased was survived by their child (Person A). Person A had not spoken to the deceased since they were a child.
The local Trustee (Trustee) were contacted in MM 20YY to administer the estate of the deceased as Person A could not be located.
On DD MM 20YY, Trustee received a communication from solicitors representing Person A indicating their intention to apply for letters of administration. Trustee subsequently ceased its involvement with the administration.
On DD MM 20YY, Person A's solicitors were contacted by a solicitor who informed them they were acting for Person B who would also be applying for letters of administration.
The property remained vacant following the deceased passing away and was in disrepair. It also accumulated debts for Council rates, water rates, and land taxes.
On DD MM 20YY Trustee were contacted by Person A's solicitors requesting they recommence applying for Probate as no other parties had initiated proceedings to apply for Probate.
Trustee contacted Person A in MM 20YY to confirm their instructions and intentions regarding the estate. Person A advised they did not wish to pursue the estate matter any further.
Trustee made enquiries with various parties as to whether they are holding a will and whether it is their intention to seek to prove the will. Trustee received no response from these parties.
Trustee applied and obtained Grant of Probate on DD MM 20YY.
As the property had remained vacant since the deceased passed away, the property was in a state of disrepair. Following an inspection of the property, minimal repairs to the property were made based on the inspection report to make it safe. These repairs were completed in MM 20YY. During MM 20YY and MM 20YY, the property was cleaned and cleared while attempting to locate the original title of the property. The lost title of the property was obtained by Trustee on DD MM 20YY.
A real estate agent was retained on DD MM 20YY. The property was sold on DD MM 20YY, with settlement occurring on 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 provision
Income Tax Assessment Act 1997 section 118-195