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Edited version of private advice
Authorisation Number: 1052310343847
Date of advice: 25 September 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 property is located at XXXX (the property).
The deceased acquired 50% share of the property before 20 September 1985, and the remaining 50% share after 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.
A family member of the deceased (Person A) was residing at the property at the time the deceased passed away, as the deceased was acting as a carer to Person A due to Person A suffering from severe health conditions.
Shortly after the deceased's passing, on DD MM 20YY, the state the property is located in went into lockdown due to the COVID-19 pandemic. Person A could not be visited or relocated due to the severity of their health conditions, nor was Person A able to assist in the clearing and arranging for the sale of the property.
On DD MM 20YY, the final COVID-19 related lockdown ended. Following the end of the lockdown, the second co-executor (Person B) was able to physically attend the property to prepare it for sale.
On DD MM 20YY, the services of a real estate agency were retained, and the property was first listed for sale on DD MM 20YY.
The property was sold on DD MM 20YY, with settlement occurring on DD MM 20YY, being less than a month after expiry of the two-year period.
The property was not used to generate assessable income at any time between the date the deceased passed away and when the property was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195