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Edited version of private advice
Authorisation Number: 1052375171683
Date of advice: 25 March 2025
Ruling
Subject: CGT - deceased estate and main residence exemption
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 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 XX XXX 20XX
The scheme commenced on:
XX XXX 20XX
Relevant facts and circumstances
The property is located at Location A (the property).
The property size is less than X hectares.
The property was the main residence of the deceased for their lifetime and not used to produce assessable income just before they died.
In 19XX Person A (the deceased's spouse) acquired the property as vacant land. Person A and Person B (the deceased) arranged to build a dwelling on the block within X year of purchase.
In 20XX Person C moved into the property to care for both their parents.
On XX XXX 20XX, the deceased acquired the property under Person A's will when they passed away.
In XXX 20XX, the deceased moved into a nursing home for a short period, returning to the property with Person A in XXX 20XX.
On XX XXX 20XX, the deceased passed away.
Person C was nominated as executor and trustee of the deceased's estate under their will.
Under the deceased's will, Person C and their sibling, Person D were beneficiaries of the entire estate in equal shares as tenants in common.
Person C engaged Law Firm A to assist with applying for probate.
On XX XXX 20XX probate was granted.
In XX 20XX, Person C travelled overseas to visit their parent's family.
On XX XXX 20XX, the title of the property was transferred to Person C as executor of the estate.
On XX XXX 20XX, a Notice of Intended Distribution was published.
In XXX 20XX, Law Firm A informed Person C that they could not represent them in administering the deceased's estate due to a conflict of interest.
On XX XXX 20XX, Law Firm B, representing Person D, wrote to Person C regarding the estate.
In XXX 20XX, Person C engaged Law Firm C to represent them.
On XX XXX 20XX, Law Firm C responded to Law Firm B and requested mediation. They advised that Person C proposed to transfer the property into both names as tenants in common and for Person D to reside in the house with Person C.
On XX XXX 20XX, Law Firm B responded to this letter advising that Person D declined the offer. They advised that Person D wished for Person C to either purchase Person D's share of the property or proceed to sell the property.
On XX XXX 20XX, Person C engaged Law Firm D to represent them.
On XX XXX 20XX, Person C requested mediation.
In XXX 20XX, Person C engaged a real estate agent to sell the property.
On XX XXX 20XX, Person D made an affidavit to the court by which they set out their reasons to commence proceedings against the estate.
On XX XXX 20XX, Person D commenced proceedings against the estate.
On XX XXX 20XX, Person C requested mediation.
On XX XXX 20XX, Person C made an affidavit to the court. The affidavit outlined that Person D had been estranged from their parent and sibling since around 19XX. It detailed Person C's unsuccessful attempts to engage with Person D.
You provided a copy of Person C's affidavit. The statements in the affidavit form part of the facts of this ruling.
Person C's affidavit detailed work completed on the property.
On XX XXX 20XX, Person C and Person D participated in court-ordered mediation and agreed to resolve the matters of the estate on the terms recorded in the Deed.
You provided a copy of the Deed. The terms of the Deed form part of the facts of this ruling.
On XX XXX 20XX, as executor of the estate, Person C signed a contract of sale for the property.
On XX XXX 20XX, the sale of the property settled.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195