Edited version of private advice

Authorisation Number: 1052347889907

Date of advice: 7 January 2025

Ruling

Subject: Commissioner's discretion - deceased estate

Question 1

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 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 ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The deceased passed away on DD MM 20YY.

The deceased owned the property located at XXXX (the property).

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.

The application for grant of probate was lodged in MM 20YY and was granted in MM 20YY.

The property was initially listed for sale on DD MM 20YY. A contract of sale was signed in MM; however, the sale did not proceed as the prospective purchaser could not obtain financing.

In MM 20YY, a second contract was signed. This did not proceed as a water pipe burst damaging the property.

The repairs were conducted and were completed in MM 20YY.

The property sold under the third contract of sale, with settlement occurring on DD MM 20YY, being less than a week after the expiry of the two year period.

The property has remained vacant between the date the deceased passed away until the date the property was sold.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195