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Edited version of private advice
Authorisation Number: 1052366756290
Date of advice: 4 March 2025
Ruling
Subject: CGT - deceased estate
Question
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
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 20YY
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The first deceased acquired the Property from their late spouse as executor of their estate. The property was transferred to the first deceased on the specified date.
The property was situated on less than two hectares of land.
The first deceased passed away on the specified date.
The property was the main residence of the first deceased just before they passed away and was not used to produce assessable income at any time.
As per the first deceased's Will, The Executor of their estate was their child, however they predeceased them.
Probate was granted for the deceased on the specified date.
The first deceased's second child was named the Executor and beneficiary of the first deceased's estate.
Significant work was done on the Property to bring the property back to a habitable state.
On the specified date, there was an attempt to sell the property, but the auction fell through.
Due to not being able to sell the Property, second deceased moved into the Property as soon as practicable and used the property as their main residence until their death.
The second deceased passed away on the specified date.
The executor of the second deceased estate was granted probate on the specified date.
On the specified date, there was another attempt to sell the property, however, there was a dispute with the neighbours regarding the boundary fencing. The boundary fencing needed to be moved to align with the original title.
The dispute resulted in another disagreement regarding who would be responsible for the expenses in relation to realignment of the boundary fencing.
On the specified date, the surveyor submitted the boundary paperwork to the Council. The paperwork was not processed until the neighbour paid their portion of the costs.
There was a verbal agreement with neighbour to update the fence line by 0 m on the left front and 0 m towards the front of the property due to the fence line being affected by the severe weather.
On the specified date, the executor paid their portion of the invoice for the plumbing work in relation to updating mains water access.
The Executor waited for the neighbour to pay their share of the invoice to place the property on the market.
On the specified date, the executor paid the neighbours share of the invoice due to the neighbour refusing to take phone calls and pay for their share of the fees.
The property was listed for sale after the payment of the invoice was finalised.
A contract was signed to sell the property on the specified date, with settlement occurring on the specified date.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195.