Edited version of private advice

Authorisation Number: 1052326432722

Date of advice: 11 November 2024

Ruling

Subject: Commissioner's discretion - deceased estates

Question

Will the Commissioner exercise his discretion and allow an extension of time to the two-year period for the property?

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:

Income year ending 30 June 20XX

The scheme commenced on:

XX XXXX 20XX

Relevant facts and circumstances

On XX XXXX 20XX, the deceased signed a will (the Will).

On XX XXXX 20XX, person A passed away.

On XX XXXX 20XX, the deceased passed away.

The Will appointed person A as executor, alternatively appointing you.

You have a relative, person B.

You and person B are beneficiaries of the Will.

On XX XXXX 20XX, probate of the Will was granted to you by the Court. You have provided a copy of the Will and the Grant of Probate.

The deceased's main residence was the property.

The Will bequeathed the whole of the property to you and person B as tenants in common in equal shares.

On XX XXXX 20XX, your solicitor received a letter from person B's solicitor stating that you were not to make any distribution from the deceased's estate as person B was considering making a family provision claim.

On XX XXXX 20XX, you received a letter from person B's solicitor insisting on changes to the Will, stating that person B could inherit more than person B was bequeathed under the deceased's Will.

On XX XXXX 20XX, your solicitors replied to person B's solicitors. Your solicitors rejected most strenuously the claims made in the letter dated XX XXXX 20XX.

Between XXXX 20XX and XXXX 20XX, there was significant email and phone correspondence between your solicitors and person B's solicitors. These negotiations were punctuated by continuous delays in response from person B and their solicitors and ultimately did not reach an agreement.

On XX XXXX 20XX, an agreement was reached that you, as executor, was to affect a transfer of the property title pursuant to the deceased's Will.

On XX XXXX 20XX, your solicitors opened a Property Exchange Australia (PEXA) workspace in order to transfer the property to person B and yourself in your personal capacities, pursuant to the Will.

Between XXXX 20XX and XXXX 20XX, person B declined and refused to accept the PEXA invitation, despite repeated requests from your solicitor.

In XXXX 20XX, given person B's refusal of the PEXA invitation, you were advised by your solicitors to submit an application with the Civil and Administrative Tribunal(CAT) seeking the public sale of the property.

On XX XXXX 20XX, you attended the scheduled CAT Mediation with person B and your legal teams. No agreement was reached. The hearing was listed for XXXX 20XX.

On XX XXXX 20XX, your solicitors received notification that person B had changed their legal representation.

On XX XXXX 20XX, your solicitors forwarded to person B's solicitor a letter detailing the actions taken to affect the transfer of the property during XXXX and XXXX 20XX.

Between XXXX 20XX and XXXX 20XX, person B again declined and refused to accept the PEXA invitation, despite repeated requests from your solicitors.

On XX XXXX 20XX, The CAT hearing was conducted. The following orders were made:

As there is only one owner of the property (the executor of the estate) and beneficiaries under a Will have no proprietary interest in any unadministered asset of the estate, there is no co-ownership dispute. There are no co-owners. The outcome was that CAT has no jurisdiction in relation to the property. Therefore, the claim in relation to the ownership of the property is bound to fail and was dismissed.

On XX XXXX 20XX, person B refused to accept the PEXA invitation. Your solicitors wrote to person B's solicitors enquiring as to whether they would accept a transfer of their half share of the property and, if not, if they disclaimed the gift to them pursuant to the terms of the Will. Your solicitors did not receive a response.

On XX XXXX 20XX, your solicitors wrote again to person B's solicitors seeking a response to the email of XX XXXX 20XX.

On XX XXXX 20XX, your solicitor received an email from person B's solicitors which acknowledged receipt of your emails of XX and XX XXXX but did not provide a substantive response. You were, therefore, unable to progress the administration of the estate in absence of person B's acceptance of a transfer of the property. You were advised that the only resolution (given CAT's lack of jurisdiction) was to now take the matter to the Court.

On XX XXXX 20XX, you filed a Court application for transfer of the deceased's property.

On XX XXXX 20XX, you attended mediation with person B and your legal teams. An agreement was finally reached. You and person B signed the Terms of Settlement. You, as executor, was to conduct the sale of the property.

On XX XXXX 20XX, the property was sold at auction.

On XX XXXX 20XX settlement of the property occurs.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195