Edited version of private advice

Authorisation Number: 1052353774251

Date of advice: 23 January 2025

Ruling

Subject: CGT - 2 year discretion

Question 1

Will the Commissioner exercise the discretion under section 118-195(1) of Income Tax Assessment Act 1997 to allow an extension of time for you to disposal of your ownership interest in the dwelling and disregard the capital gain 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:

Income Tax Year ending XX XX 20XX

The scheme commenced on:

XX XX 20XX

Relevant facts and circumstances

On XX XX 20XX, the deceased and their child, Person A, purchased the property as tenants in common in equal shares.

The property was less that X hectares in land.

The deceased used the property as their main residence until their passing on XX XX 20XX.

On XX XX XX, X and X were appointed executors of the estate (executors).

Between 20XX and 20XX, Person A engaged with the executors on the basis that they intended to make a claim:

a.              for a Family Provision Order of the estate of the deceased; and/or

b.              that the deceased's will was not a valid will.

In XX 20XX, Person A was found to be incapable of managing their affairs by the State Tribunal and their child, Person B, was appointed as their financial manager.

In XX 20XX, the State Tribunal revoked the appointment of Person B as Person A's financial manager and appointed the State Department as Person A's financial manager.

Between XX 20XX until XX 20XX, the State Department engaged with the executors to negotiation a resolution to the claims intended to be agitated by Person A.

In XX 20XX, a resolution of Person A's intended claims was recorded in a Deed subject to approval by a court of competent jurisdiction.

In XX 20XX, prior to approval being granted, the State Department disclosed to the executor's that Person A was terminally ill and their death was imminent. The executors took the view that the Deed could no longer be approved and should be set aside.

In XX 20XX, Person A passed away and Person B was appointed sole executor of their estate (Person A's estate). By orders dated XX XX XX, Person B was appointed to represent Person A's estate in the proceedings against the deceased's estate.

In XX 20XX, the deceased's estate and Person A's estate settled the family provision claim thereby allowing the property to be sold. The respective estates immediately sought quotes for remedial works.

In XX 20XX, remedial works were undertaken at the property.

In XX 20XX, the estates signed a contract for sale of the property.

In XX 20XX, settlement of the property occurred.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 188-195