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Edited version of private advice
Authorisation Number: 1052317204178
Date of advice: 11 October 2024
Ruling
Subject: Commissioners discretion - 2-year disposal
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 acquired 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 X June 20XX.
The scheme commenced on:
X July 20XX.
Relevant facts and circumstances
The deceased was an Australian resident for taxation purposes.
The deceased purchased the Property pre-CGT.
The Property is situated on less than 2 hectares.
The Property was the deceased's main residence until XX XXX 20XX when they were moved into an aged care home.
The Property was never used to produce assessable income.
The deceased died on X XXX 20XX.
From the date the deceased was moved into the aged care home, to their date of death, the Property remained vacant.
The deceased's Will was created and signed on X XXX 20XX ('the Will')
The deceased appointed an executor and trustee of their Will.
The executor made an application for grant of probate on XX XXX 20XX.
A caveat was filed by a second party ('claimant') to block the grant of probate on XX XXX 20XX.
The caveat was filed on the basis of an allegation of issues with the deceased's capacity to create the Will, and previous Wills.
Between XX XXX 20XX and XX XXX 20XX, the caveat was renewed by the claimant approximately every 6 months.
During this time, the executor and claimant engaged solicitors to settle the dispute.
On XX XXX 20XX, the claimant sent a proposal of settlement.
On XX XXX 20XX, a draft Deed of Family Arrangement was prepared.
The Property was appraised on XX XXX 20XX.
In XXX 20XX, the drafting of a Settlement Deed commenced.
On XX XXX 20XX, a Settlement Deed was signed by both the executor and the claimant.
On XX XXX 20XX, the claimant withdrew the caveat.
On XX XXX 20XX, the executor's solicitor submitted an application for a grant of probate. The Supreme Court Probate Registry ('the Court') subsequently advised the executors solicitor that a new application will need to be made.
On XX XXX 20XX, the Court advised the executor that they will need to attend the Court in person to re-sign the original Will. This was done on XX XXX 20XX.
On XX XXX 20XX, the Grant of Probate was issued to the executor.
On XX XXX 20XX, the Property was sold at auction and formally settled on XX XXX 20XX.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195