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Edited version of private advice
Authorisation Number: 1052330691057
Date of advice: 12 November 2024
Ruling
Subject: Commissioner's discretion - deceased estate
Question
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'.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on:
DD MM 20YY
Relevant facts and circumstances
The deceased passed away on DD MM 20YY.
The property is located at XXXX (the property).
The deceased acquired the property before 20 September 1985.
The property was the main residence of the deceased just before they passed away.
The property was situated on less than two hectares of land.
The will of the deceased nominated Person A as their executor. Due to personal issues, Person A was unable to administer the estate.
Following Person A renouncing probate, Person B was granted Letters of Administration.
Shortly after the deceased passed away, the property was inhabited by squatters. Person B visited the property shortly after receiving Letters of Administration to find the squatters had substantially damaged the property (along with accumulating large amounts of garbage within the property).
Person B contacted a law firm to assist with the eviction of the squatters. A possession warrant was executed on DD MM 20YY.
Following the removal of the squatters, the property required extensive clearing and cleaning. Also, there were continuing problems with squatters attempting to occupy the property.
The property was sold and settled 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.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195