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Edited version of private advice
Authorisation Number: 1052366918765
Date of advice: 10 March 2025
Ruling
Subject: CGT - deceased estate
Question 1
Will the Commissioner exercise the discretion under section 118-195 of the 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 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:
DD MM YY
The scheme commenced on:
DD MM YY
Relevant facts and circumstances
On DD MM YY, the deceased acquired residential property at XXXX (the property).
On DD MM YY, the deceased's de-facto partner (Person A), moved into the property.
The deceased died on DD MM YY.
The property was the deceased's main residence at date of death, and it was not used to produce income.
The property contains a dwelling and is less than 2 hectares in size.
The deceased was survived by their:
• de-facto partner,
• adult child 1, and their spouse and children.
• adult child 2.
On DD MM YY, probate of the deceased's will (dated DD MM YY), was granted to XXXX and XXXX as the named executors in will.
Person A renounced probate to allow them to contest the will.
The will granted Person A with the right to use and occupy the property during their lifetime or until they vacate the property. Subsequently, the property will pass to adult child 1.
On DD MM YY, Person A filed an Originating Motion with the County Court of XXX to seek further provisions from the estate.
On DD MM YY, the executors and Person A agreed to settle the claim as outlined in the Terms of Settlement.
The Terms of Settlement provided Person A with the sole use of the property for life as outlined in the will for their 'use and enjoyment'. It also allowed Person A to instruct the executors to sell the property and use the funds to acquire a replacement property (or residential unit in a retirement village or pay an aged care facility accommodation bond). Person A also received a payment of $XX as part of the settlement.
On DD MM YY, Person A moved out of the property and into an aged care facility.
Person A instructed the executors to sell the property on DD MM YY.
The executors placed the property on the market, and it was sold on DD MM YY.
On DD MM YY, Person A died.
On DD MM YY, the property sale settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195