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Edited version of private advice
Authorisation Number: 1052348207703
Date of advice: 16 January 2025
Ruling
Subject: Commissioner's discretion - deceased estate
Question 1
Will the Commissioner exercise the discretion under section 118-195 of 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 ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on XX/XX/20XX.
The dwelling is located at XXXX.
The deceased acquired the property before 20 September 1985.
The Property was the main residence of the deceased just before they passed away and not used to produce assessable income at that time.
The Property was situated on less than X hectares of land.
The Property has never been used to produce assessable income.
Probate was granted on XX/XX/ 20XX.
The deceased has a Will permitting beneficiary A to have life tenancy in the Property. If beneficiary A passes away, gets married or leaves the Property, the Property becomes part of the residuary in the estate.
Beneficiary A was diagnosed with an illness and was deemed not able to live in the Property.
In XX/20XX, beneficiary A underwent surgery.
In XX/20XX, beneficiary A moved into an aged care facility and the life tenancy ended.
The Property remained vacant since XX/20XX.
The proceeds of the sale will be equally distributed as per the Will to beneficiary's A, B, and C. However, in 20XX, beneficiary C passed away and according to the Will, his portion will be distributed to D and E as the beneficiaries.
A contract to sell the Property was entered into on XX/XX/20XX with settlement occurring on XX/XX/20XX. The Property was sold by the executors of the estate.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195