Edited version of private advice

Authorisation Number: 1052341812242

Date of advice: 10 December 2024

Ruling

Subject: Commissioner's discretion - deceased estate

Question 1

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 1

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:

XX XXXX 20XX

Relevant facts and circumstances

Before 19 September 1985, the deceased purchased the dwelling located at the property.

The property is less than 2 hectares in size.

On XX XXXX 20XX, the deceased executed their last Will and testament, where:

•                     Person A was appointed executor.

•                     The property was given to the executor upon trust to transfer to person B for their life with remainder to the deceased's grandchildren. The life estate was subject to person B keeping the property in the same state of repair as at the date of the deceased's death, and paying on the due date all rates, taxes and strata levies.

On XX XXXX 20XX, the deceased passed away.

On XX XXXX 20XX, the Supreme Court granted probate to the executor.

On XX XXXX 20XX, the property was transferred to person B for a life estate. In addition, you were listed as tenants in common in equal shares for an estate in remainder.

The property was person B's main residence and was not used to produce assessable income at any time.

Person B abided by the Will of the deceased and kept the property in a reasonable condition.

On XX XXXX 20XX, person B's grandchild, person C and their partner moved into the property to help take care of them.

In early 20XX, person B moved out of the property into a nursing home due to them recovering from a surgery and access at the property was limited. Person C and their partner remained in the property during this time.

On XX XXXX 20XX, you were the only grandchildren of the deceased.

On XX XXXX 20XX, person B passed away at a nursing home.

In XXXX 20XX, you made initial contact to XX real estate agents regarding the selling of the property.

On XX XXXX 20XX, a new title of the property was issued listing you as tenants in common in equal shares.

On XX XXXX 20XX, you signed the Auction Agency Agreement with a real estate agent to sell the property.

On XX XXXX 20XX, person C and their partner moved out of the property. They were not paying rent for the duration of their stay and all utilities, rates, strata fees etc remained in person B's name until you had the title changed via notice of death.

After XX XXXX 20XX, you made minor repairs to the property to prepare it for sale.

On XX XXXX 20XX, the property went up for auction and the contract was exchanged.

On XX XXXX 20XX, settlement occurred.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195