Edited version of private advice

Authorisation Number: 1052326956690

Date of advice: 21 January 2025

Ruling

Subject: Commissioner's discretion - deceased estates

Question 1

Will the Commissioner exercise the discretion under section 118-195 of 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 1

Yes.

Having considered your circumstances and the relevant factors the Commissioner will allow and 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:

DD MM YY

The scheme commenced on:

DD MM YY

Relevant facts and circumstances

This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect, and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

On the specified date the residential property was purchased by the deceased and their spouse. The property was less than X hectares in size.

The deceased and their spouse held the property as tenants in common in equal shares, the property was their main residence throughout their ownership and was not used to produce income.

The spouse passed away in MM YY.

The deceased passed away on DD MM YY.

The will appointed children of the deceased Executor's of the estate.

In MM YY, the Executors commenced working with their accountant to commence administering the deceased estate with the following actions:

•                Attempting to locate the Will of the spouse.

•                Working with numerous banks via letter correspondence to identify the assets of the spouse.

•                Responding to correspondence from the accountant to confirm total assets of the deceased and spouse.

The deceased and spouse were excessive hoarders which required significant number of items to be removed from the property to have the property at a state ready for sale.

In MM YY, 2 skip bins were hired to commence removing items from the property.

In MM YY, the Executor's engaged real estate agents for property appraisals to commence selling the property.

On the specified date, the solicitors identified the deceased's death certificate was incomplete and included errors.

On the specified date, a COVID state of emergency was declared for the XX commencing strict lock down measures. Due to the strict measures the Executor could not travel interstate to assist with clearing the property. the Executor was the sole carer for their children and was fearful if they travelled, they may not be able to return to look after their children.

Between the specified time, the Executor, could only obtain permits to keep lawns and gardens tidy due to the COVID lockdowns.

Due to COVID restrictions the Executor could not attend their safe deposit box to provide the required documents to amend the death certificate, this process took X months to finalise.

On the specified date, the Executor spouse was diagnosed with cancer, this delayed cleaning the property for sale as the Executor spent their time caring for their spouse and attending medical treatments.

The Executor sustained a workplace injury due to the injury they required assistance with clearing the property. When they could travel to the property due to restrictions this was a X hour round trip and the Executor had limited time to attend to the property due to caring for their spouse, children and working full time.

On the specified date, the deceased's amended death certificate was issued.

On the specified date, applications commenced for the estate of the spouse.

On the specified date, probate was granted for the deceased.

On the specified date, letters of administration were granted for the spouse and process commenced to transfer the land title to the Executors.

On the specified date, the National Bank discharged the mortgage. The Executors became the registered owners on the land title the property remained as tenants in common in equal shares as the following:

•                The executors of the estate of the spouse.

•                The executors of the estate of the deceased.

On the specified date, the Executor required medical treatment which further delayed clearing the property for sale.

On the specified date, Executors commenced sale process for the property.

On the specified date, COVID restrictions were reduced allowing the Executor to travel to interstate. The Executors commenced meetings with real estate agents and the Executor assisted with further clearing the property for sale where several trailers load of belongings were further removed from the property.

On the specified date, the property was first listed for sale.

On the specified date, Executors commenced preparation of Vendor section XX statement.

On the specified date, correspondence and signing by Executors of the Vendor section XX statement was finalised.

On the specified date, contract was signed for sale of the property.

When the property settled on the specified date, the deceased estate received one-half part and share of the proceeds of the sale.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195