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Edited version of private advice
Authorisation Number: 1052333844330
Date of advice: 22 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 (ITAA 1997) to allow an extension of time for you to dispose of the deceased's ownership interest in the dwelling and disregard the capital gain or capital loss you made on the disposal of 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:
Year ending 30 June 20xx
Year ending 30 June 20xx
The scheme commenced on:
1 July 20xx
Relevant facts and circumstances
In 19xx, the deceased acquired the property with their spouse.
The deceased's spouse died on xx xx 19xx and their 50% ownership interest was acquired by the deceased through the right of survivorship.
The property is less than 2 hectares.
The property was the deceased's main residence.
In 19xx, the deceased transferred a one-sixth share each of the property to two of their children.
One of the children resided at the property with their parent.
In xx 20xx, the child who resided at the property purchased their sibling's one-sixth interest.
At the time of the deceased's death, the deceased owned a four-sixths interest, and their child owned a two-sixths interest in the property as tenants in common.
The deceased passed away on xx xx 20xx.
Probate was granted on xx xx 20xx.
The deceased's will appointed their solicitor as executor. The will provided a life interest to one of their children on the condition that they reside at the property. Should they cease to reside at the property the will stipulates they receive a one-sixth share of the value of the property with the remainder of the estate to be divided in equal shares between the deceased's five children.
The property has never been used to produce assessable income.
The child surrendered their life tenancy, and the property was sold on xx xx 20xx with settlement occurring on xx xx 20xx.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195