Edited version of private advice

Authorisation Number: 1052337034447

Date of advice: 16 December 2024

Ruling

Subject: Commissioner's discretion - deceased estate

Question

Will the Commissioner exercise the discretion under section 118-195 of Income Tax Assessment Act 1997 (ITAA 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 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:

Year ended 30 June 20XX

The scheme commenced on:

XX XX 20XX

Relevant facts and circumstances

On XX XX 20XX, the deceased passed away leaving their will dated XX XX 20XX.

At date of passing, the deceased owned a property at XX XX XX, (the property).

The deceased purchased the property after 20 September 1985.

The property size is less than 2 hectares.

The deceased was the sole owner of the property when they died. It was their main residence and not being used to produce income.

On XX XX 20XX, you applied for probate.

On XX XX 20XX, you received an email from XX XX XX informing you were not able to sell the property until you resolved state strata law issues.

In XX 20XX, you exchanged several emails with XX. They advised that when the property was subdivided in 20XX, the developer did not hold the first Annual General Meeting (AGM) of the newly formed strata property within 3 months of the registration. XX advised you would not be able to sell the property without the minutes of the first AGM.

On XX XX 20XX, you were granted probate.

You supplied a copy of probate and the will with your private ruling request.

On XX XX 20XX, you and XX held the first AGM to clarify how insurance of the shared driveway and maintenance of the common areas would to be split between the 2 lots.

During XX 20XX to XX 20XX, you exchanged several emails with XX and you revised the minutes of the first AGM until you were both satisfied.

On XX XX 20XX, you commenced the process of selecting a real estate agent to sell the property. However, you were waiting on XX to advise how to proceed following before you could list the property for sale.

On XX XX 20XX, XX advised the paperwork required original signatures before it could be lodged.

During XX 20XX to XX 20XX, XX experienced staffing changes and delayed the in-person signing.

On XX XX 20XX, you discovered a caveat on the property. The caveat was unknown until this point because the property had not been listed earlier due to the dispute with XX.

On XX XX 20XX, you could not find the original Duplicate Certificate of Title (DCOT) among the deceased's papers. You contacted a conveyancer in XX to help lodge an application for a replacement DCOT.

On XX XX 20XX, you submitted 2 applications to XX:

1.        Form XX, to be the registered proprietor of land by transmission to XX.

2.        Verification of Identity (VOI) application to confirm your identity and lift the caveat.

On XX XX 20XX, state government lifted border restrictions.

On XX XX 20XX, XX provided you with a withdrawal of Caveat Form XX. XX advised you that to submit this form, you had to:

1.        Attend the XX Office in XX in person to have an interview with the Assistant Registrar; and

2.        Provide the original DCOT.

During XX 20XX to XX 20XX, you found the original DCOT while waiting for the replacement DCOT. However, you fell ill, and were unable to attend an in-person meeting at XX to resolve the caveat.

On XX XX 20XX, you emailed XX to book an in-person meeting.

On XX XX 20XX, you arranged for an in-person meeting at XX.

On XX XX 20XX, XX issued a new DCOT without the caveat, enabling you to list the property for sale.

During XX to XX 20XX, your sibling claimed that the deceased had borrowed money from them personally in 20XX to purchase the property. There were questions as to the amount borrowed and the documentation supporting this amount. You resolved their claim in XX 20XX.

In XX 20XX, you conducted research to select a new real estate agent.

In XX 20XX, you engaged a new real estate agent and prepared the property for sale.

On XX XX 20XX, you signed a contract to sell the property.

On XX XX 20XX, the property settled.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195