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Edited version of private advice
Authorisation Number: 1052375983114
Date of advice: 24 March 2025
Ruling
Subject: Commissioner's discretion - 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:
Year ended 30 June 20XX
The scheme commenced on:
DD MM 20YY
Relevant facts and circumstances
The deceased passed away on DD MM 20YY.
The property is located at XXXX (the property).
The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time.
The property was situated on less than X hectares of land.
On DD MM 20YY, the deceased and their spouse purchased the property as joint tenants.
On DD MM 20YY, the spouse of the deceased passed away and the deceased acquired their spouse's interest in the property as the surviving joint tenant.
The deceased continued to reside in the property until DD MM 20YY, when they moved to a care facility.
On DD MM 20YY, the deceased moved to hospital where they remained until they passed away.
You chose on behalf of deceased, to continue to treat the property as their main residence when they moved out of the property.
You requested solicitors (the solicitors) to apply for probate and assist with administering the estate.
Probate was granted on DD MM 20YY.
On DD MM 20YY, Person A approached you to purchase the property.
On DD MM 20YY, the solicitors advised they had completed the contract of sale and will send the contract to Person A the following day for signing.
On DD MM 20YY, Person A's representatives advised the solicitors that they won't sign the contract of sale until they finalise a personal matter. They confirmed Person A still intended on purchasing the property.
On DD MM 20YY, you consulted with the solicitors who advised you to notify Person A that you were not proceeding with the sale.
On DD MM 20YY, Person A advised you that they had signed the contract and sent it to their settlement agent.
On DD MM 20YY, the solicitors advised you that they had not received any signed documentation from Person A to indicate that they intended to proceed with the purchase. The solicitors also advised that if you wished to consider alternate options to dispose of the property, that you should advise Person A as soon as possible.
On DD MM 20YY, Person A was advised that the private sale will not be proceeding.
On DD MM 20YY, the property was listed for sale.
On DD MM 20YY, you received an offer to purchase the property.
On DD MM 20YY, you accepted this offer, with settlement occurring on DD MM 20YY.
The property had not been used to generate assessable income between the date the deceased passed away until the date the property was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-145
Income Tax Assessment Act 1997 section 118-195