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Edited version of private advice
Authorisation Number: 1052314393687
Date of advice: 7 October 2024
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
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'.
Question 2
Will the estate be required to lodge a tax return to declare the capital gain or capital loss you made on the disposal?
Answer
No.
As the Commissioner has exercised the discretion to disregard the capital gain or capital loss, no tax return declaring the exempt disposal is required. Further information about when a deceased estate tax return is required can be found by searching ato.gov.au for 'QC 40483'.
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 their share of the property 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.
Probate was granted on DD MM 20YY.
The property was purchased by the deceased as tenants in common with another individual (Person A), with each owning an equal share.
The will of the deceased provided Person A with a life interest in the property.
Person A passed away on DD MM 20YY, with probate being granted on DD MM 20YY.
The property was contracted for sale on DD MM 20YY, with settlement occurring on DD MM 20YY.
The property was not used to produce assessable income at any time between the date the deceased passed away until the date the property was sold.
The estate of the deceased did not earn any other assessable income during the financial year the property was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195