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Edited version of private advice
Authorisation Number: 1052337926828
Date of advice: 29 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 periods:
Year ending 30 June 20XX
Year ending 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 after 20 September 1985.
The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time.
The property was situated on less than two hectares of land.
Probate was granted on DD MM 20YY to both you and Person A.
The property was bequeathed to you in full per the Will of the deceased. At the time the deceased passed away, you were also residing in the property. You continued to reside in the property until MM 20YY. The property was transferred into your name following the deceased passing away.
You have been diagnosed with a medical condition, which causes various impairments.
Your intention to dispose of the property was hindered by the will of the deceased being contested in the Supreme Court on DD MM 20YY by Person A. The property was not involved in the following legal proceedings, but these proceedings did require your full attention.
The case was not listed for hearing until the value of the estate had been determined. There was an interlocutory proceeding regarding the identity of the single expert witness and the scope of the valuation evidence on DD MM 20YY.
Mediation between you and Person A was initially scheduled to take place on DD MM 20YY (with agreements from all parties involved), however Person A delayed this session.
In MM 20YY, another mediation session between the parties occurred and final settlement of the matter concluded on and around DD MM 20YY.
The property was listed for auction on DD MM 20YY. The property was sold via auction on DD MM 20YY, with settlement occurring on DD MM 20YY.
Following your departure from the property, you allowed an acquaintance to move into the property. You received below market rent income while the acquaintance lived at the property between MM 20YY to MM 20YY.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195