Edited version of private advice

Authorisation Number: 1052312283837

Date of advice: 2 October 2024

Ruling

Subject: Commissioner's discretion - inherited dwelling

Question

Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling the property and disregard the capital gain or 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 ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The deceased acquired full ownership of a property (the property) after the passing of their spouse on XX/XX/20XX.

Severe wet weather and storms in XX 20XX caused damage to the roof on the property.

In XX 20XX, the wet weather continued which caused internal damage to the property. Due to the damage of the property and the deceased's failing health, the deceased entered a care facility until the property repairs could be completed.

On XX/XX/20XX, an insurance claim was lodged for the damage to the roof and internal parts of the property.

A letter dated XX/XX/20XX, from their insurance representative, explained that a client manager had been assigned to the insurance claim. Two repairers had been assigned to provide quotes for the repairs.

On XX/XX/20XX, children of the deceased received an email advising that experts had been appointed to assist with the damage to the property.

There were long delays with the contractors due to Covid-19 lock downs and previous work commitments.

In XX 20XX, a quote for the roof repairs was received, further delays occurred to the commencement of the repairs due to the roof barge tiles being handmade in another city.

The deceased passed away on XX/XX/20XX. The property was the deceased's main residence at the time of their death and was not used to produce assessable income.

The Will of the deceased appointed their children (the trustees) as executor's and trustees of the deceased's estate.

On XX/XX/20XX, the works on the roof of the property was accepted to commence.

Appointments made to attend and start work on the roof were cancelled and postponed due to ongoing Covid-19 lockdowns, personal isolation, labour and material shortages.

Probate was granted to the trustees on XX/XX/20XX and transfer of the title to the trustees occurred on XX/XX/20XX.

On XX/XX/20XX, the insurance provider started the claim process for the internal repairs on the property. The internal repairs, which included water damage and mould, could not begin until the roof was repaired.

On XX/XX/20XX, the internal repairs were completed to the property.

On XX/XX/20XX, the insurance claim for the repairs on the property was paid to the estate trust account.

On XX/XX/20XX, balance of the estate was finalised.

In XX 20XX, the trustees commenced cleaning the property and removing personal belongings.

Between XX 20XX and XX 20XX, one of the trustees was unable to provide much help to the other trustee. This was due to the trustee's spouse needing medical treatments and running their business alone which was located over an hour away from the property.

In XX 20XX, the trustees commenced appraisals with real-estate agents to put the property on the market.

On XX/XX/20XX, the trustees signed an unconditional sale contract for the property and property settlement date will occur less than three months after the expiry of the two-year period.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195 (1)