Edited version of private advice

Authorisation Number: 1052395336588

Date of advice: 20 May 2025

Ruling

Subject: CGT - deceased estate

Question 1

Will the Commissioner exercise the discretion under section 118-195 of 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

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 ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

Person A and their spouse (Person B) owned a dwelling at Place A(the property).

The property was situated on less than two hectares of land.

Person A and Person B acquired the dwelling after 20 September 1985 and lived in it as their main residence.

Person B passed away and their ownership interest in the property passed to Person A.

Person A(the deceased) passed away.

In their will, the deceased bequeathed the property to their children as follows:

•                interest to Child A

•                interest to Child B

•                interest to Child C

•                interest to Child D

•                interest to Child E

Probate was granted to the executor several months after the deceased passed away.

The executor offered to sell the property on your behalf, but you declined.

Child C refused to sign the forms granting the executor authority to administer the estate of the deceased (the estate).

As a result, Person B had to travel overseas to where Person C was located.

Person B returned from overseas after obtaining Person C's signature.

Shortly after this, distribution of the estate was finalised.

In early 20XX, COVID restrictions commenced. This caused delays with accessing the property and preparing it for sale.

The following month, Child B was diagnosed with stage 4 cancer.

They had surgery shortly thereafter. Following a brief period of recovery they commenced chemotherapy.

From the time of diagnosis until they passed away, Child B continued chemotherapy.

Following Person B's death, their spouse Person C inherited their share of the property.

The following year, it was discovered that the roof of the property was collapsing.

Support poles were installed to prevent a collapse of the roof.

Maintenance of the property revealed a major failing of the roof support infrastructure.

Probate for Child B's estate was granted to Person C and they acquired Child B's share of the estate.

Works began to restore the collapsing roof.

Several months later, works to restore the collapsing roof were completed.

The following month, a real estate agent was engaged for the sale of the property.

Several months later, a contract for the sale of the property was signed.

The following month, settlement of the property occurred.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195