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Edited version of private advice
Authorisation Number: 1052402788232
Date of advice: 29 May 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.
This ruling applies for the following period:
Year ending 30 June 20YY
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
The deceased acquired an interest in the property at xxx xxx / xxx xxx, xxx, xxx with their sibling on DD MM 19YY as joint tenants on the death of their parent. Both resided at the property. The property is greater than 2 hectares.
The sibling, passed away on DD MM 20YY. Their ownership interest passed to the deceased under the right of survivorship.
The property was used in a primary production business until the end of the 20YY financial year. From 20YY the property earned income from agistment.
The dwelling situated on the property continued to be the main residence of the deceased until they moved to permanent residential care in 20YY.
The dwelling remained vacant and was not used to produce income. The property surrounding the dwelling continued to earn income through agistment.
The deceased passed away on DD MM 20YY.
The deceased bequeathed their estate amongst extended family, friends and various religious and charitable organisations. The executors of the estate are xxx xxx and xxx xxx.
In MM 20YY a family relation of the deceased filed a probate caveat in the Supreme Court.
On DD MM 20YY the executors made an application to have the caveat removed.
On DD MM 20YY the Supreme Court ordered the removal of the caveat.
Later in 20YY, the family relation commenced legal proceedings and lodged a further caveat with the Lands Titles Office.
The dispute was scheduled for trial in the District Court on DD MM 20YY. Additional applications were made by both parties and COVID-19 pandemic caused further delay to the hearing. The trial took place on DD and DD MM 20YY, with judgement reserved.
On DD MM 20YY the claim by the family relation was dismissed.
The family relation subsequently lodged an appeal with the Supreme Court. The appeal was heard on DD MM 20YY with a decision reserved.
On DD MM 20YY the appeal was dismissed. The caveat was withdrawn on DD MM 20YY.
A contract for the sale of the property was signed on DD MM 20YY with settlement occurring on DD MM 20YY.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195