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Edited version of private advice
Authorisation Number: 1052310397638
Date of advice: 26 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 (ITAA 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 private ruling applies for the following period
Year ending 30 June 20xx
The scheme commenced on:
1 July 20xx
Relevant facts
The deceased passed away on XX XX 20XX.
As at the date of death, the deceased owned a dwelling (the dwelling).
The dwelling was the main residence of the deceased and was never used to produce assessable income.
The land size is less than 2 hectares.
The dwelling was vacant at the time of the deceased's passing as it was damaged by a natural disaster and was undergoing insurance repairs.
The dwelling was occupied by some family members including one of the beneficiaries of the estate (person A) and person A's relatives (person B) and person C from XX 20XX.
Probate was granted on XX XX 20XX with person B being the executor of the estate.
Ongoing negotiations continued with the executor about whether person A was going to acquire your share of the dwelling or whether it was going to be sold. These negotiations were lengthy, and you ultimately decided that you needed legal representation.
You engaged legal representation in XX 20XX to advise you on the best way to proceed with the sale.
Title to the dwelling was transferred to the beneficiaries on XX XX 20XX.
There was ongoing disagreement about the sale price of the dwelling and the agent to be selected to sell the dwelling. This caused significant delays in selling the dwelling.
The dwelling required some cleaning and preparation for sale. Negotiating consent for this to occur took longer than anticipated and caused delays in you being able to sell the dwelling.
Agreement was reached on an agent to sell the dwelling in XX 20XX.
The asking price was reduced around XX 20XX.
An offer was made to purchase the dwelling in XX 20XX.
Contract for the sale was entered into on XX XX 20XX.
Settlement took place a short time later.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195