Edited version of private advice

Authorisation Number: 1052403199382

Date of advice: 11 June 2025

Ruling

Subject: Commissioner's discretion - deceased estate

Question

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

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 ending DD/MM/20YY

The scheme commenced on:

DD/MM/20YY

Relevant facts and circumstances

On DD/MM/20YY, the deceased passed away, leaving a will.

At date of death, the deceased owned a property at XXX which was their main residence, which they purchased on DD/MM/19YY.

The will appointed Person A as the executor of their estate.

The will named Person A, Person B and Person C as the beneficiaries of their estate.

On DD and DD/MM/20YY, Person B's solicitor, Lawyer A, requested Person A provide a schedule of assets for the Estate.

On DD/MM/20YY, Person B engaged a second lawyer, Lawyer B, to send correspondence to Person A enquiring what steps had been taken to administer the deceased's estate.

On DD/MM/20YY, Person A responded by setting out the assets and liabilities of the estate and that no notices of claim had been served on the estate.

On DD/MM/20YY, Person A advised they were intending to sell the property and not attempt to buy-out the other beneficiaries.

On DD/MM/20YY, Person B filed a caveat in the State A registry which prohibited the sale of the property.

On DD/MM/20YY, you state Person B through a newly appointed lawyer, Lawyer C, wrote to Person A requesting similar information to what had been provided to previous lawyers.

On DD/MM/20YY, Person A responded to the questions asked, and also requested details on what basis Person B had for lodging the caveat preventing the sale of property, and requested it be removed.

On DD/MM/20YY, Lawyer C request Person A apply for probate.

On DD/MM/20YY, Person B filed a further caveat in the XXX registry.

On DD/MM/20YY, Person A made an application for probate in the Supreme Court Registry in XXX, which was issued on DD/MM/20YY. Person A at this stage was unaware Person B had filed this caveat in XXX, and therefore the probate issued was revoked on DD/MM/20YY.

Court documents show correspondence continued for several months, and a number of affidavit's were filed.

On DD/MM/20YY, Person B withdrew his caveat.

On DD/MM/20YY, Person A was granted probate.

On DD/MM/20YY, Person B requested an Estate Account.

On DD/MM/20YY, Person B filed an application seeking an account of the estate.

Over the next several months, proceedings continued regarding the account of the Estate, and you advise Person A continued to remain under threat of litigation by Person B, and a number of affidavits were filed.

On DD/MM/20YY, Person A again indicated their intention to Person B to have the property sold and Person B requested they be consulted in relation to the sale and outlined their disagreements with the previous valuations obtained.

In MM/20YY, Person A enquired with Real Estate Company A with regards to the sale of the property and provided these details to Person B on DD/MM/20YY.

On DD/MM/20YY, Person B notified Person A that they had made enquiries with Real Estate Company B and requested that this agent be engaged for the sale of the property.

On DD/MM/20YY, Person A agreed to engage Company B to avoid further delays.

On DD/MM/20YY, the property was listed by Company B.

On DD/MM/20YY, a contract of sale was signed on the property.

On DD/MM/20YY, settlement occurred.

At all material times, the property was not used for producing assessable income.

The property is less than 2 hectares in size.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195