Edited version of private advice

Authorisation Number: 1052343796534

Date of advice: 08 January 2025

Ruling

Subject: Commissioner's discretion - deceased estate

Question

Will the Commissioner exercise the discretion under section 118-195 of 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:

XX XX 20XX

Relevant facts and circumstances

The deceased passed away on XX XX 20XX.

Prior to 20 September 1985, the deceased and their sibling bought a property as joint tenants.

On XX XX 19XX, the deceased became the sole proprietor of the property via survivorship.

On XX XX 19XX, the deceased was registered on the title.

The property's land area is less than 2 hectares.

There were no capital improvements made to the property during the deceased's ownership period.

The deceased did not have an ownership interest in any other properties. The deceased resided in the property as their main residence until their death.

At no point was the property available for rent or used for income producing purposes by the deceased.

The deceased passed away intestate.

The deceased was not legally married nor in a relationship nor did they have any children at the time of their death.

After their death, the property remained vacant. The deceased's neighbour maintained the lawn and collected the mail for several years in anticipation the estate would be finalised.

After almost a decade, the neighbour was concerned about hygiene and the property being a fire hazard.

The neighbour entered the property along with police as it had been left derelict for several years posing a risk to adjacent properties.

On XX XX 20XX, the neighbour contacted entity X.

No action was taken to administer the estate prior to entity X's involvement as there were no details on any next of kin.

On XX XX 20XX, a Notice of intention was advertised advising entity X's intention to apply for a grant of administration.

On XX XX 20XX, entity X submitted a missing persons advertisement requesting for any next of kin to notify them, no person claiming to be a relative or next of kin of the deceased contacted entity X.

On XX XX 20XX, entity X was granted probate for the deceased's estate.

On XX XX 20XX, entity X immediately commenced administrating the estate and carried out the following with regards to the property;

•                     Engaged Company A to clean up the property.

•                     Engaged Company B to provide a valuation of the property to set the reserve price for sale at auction.

•                     Engaged Company C to commence advertising and marketing the property for sale.

On XX XX 20XX, entity X commenced initial genealogy searches and the genealogy report was finally completed in 20XX with the next of kin being confirmed as cousins, all residing in Country A.

On XX XX 20XX, the property was sold in its present condition.

On XX XX 20XX settlement occurred.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195