Edited version of private advice

Authorisation Number: 1052416280323

Date of advice: 3 July 2025

Ruling

Subject:Commissioner's discretion - dispose of a dwelling

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 private ruling applies for the following period

Year ending 30 June 20YY

The scheme commenced on:

1 July 20YY

Relevant facts

The deceased passed away.

The deceased owned a dwelling (the dwelling)

The dwelling was the main residence of the deceased from the date of acquisition until the date of their death and was never used to produce assessable income.

The land size is less than 2 hectares.

The dwelling was acquired by the deceased and their spouse as joint tenants prior to 20 September 1985; with the deceased becoming the sole registered proprietor following the death of their spouse.

The dwelling has been vacant since the deceased passed away.

You were named as the executor in the Will of the deceased. The Will provided that if you were unable or unwilling to act then your Sibling (Sibling A) would be appointed as the executor.

You considered relinquishing your role as executor and discussed this with Sibling A, however there was limited options available.

You and Sibling A both reside in a major city which is approximately xxx kilometers distance from the dwelling.

Sibling A operates their own business and has less time to administer the estate. It was agreed that you would apply for probate as the sole executor.

In xx to 20xx to xx 20xx you discussed your leave with your manager, and you were confident that you would be able to have sufficient time to administer the estate and that you would be able to undertake the tasks of preparing the dwelling for sale.

You obtained probate around xx 20xx.

In xx 20xx your work arrangements changed and your workload greatly increased. Your planned time off was greatly diminished. You were unable to take significant leave from xx 20xx to around xx 20xx. After this time, you were able to use leave and devout more time to preparing the dwelling for sale.

You attended the property after the passing of the deceased for approximately xx weeks and again in early 20xx and started clearing the dwelling.

The scale of personal possessions stored at the dwelling was significant. The dwelling consisted of x bedrooms, x garages, office, kitchen, lounge, dining and hallway which contained a x metre long storage closet floor to ceiling. There was no storage space left as the dwelling had been the family home for a large number of years.

The emptying of the house was time consuming. You were unable to donate personal possessions to the local charity stores as they were at capacity. You transported some items to a major city for donation.

You took numerous car trailer loads to the local refuse site. You also filled a skip bin.

You and family members travelled from the major city as well family who lived locally assisted in clearing the dwelling of personal possessions.

You also experienced delays in ensuring that the below ground saltwater chlorine pool was maintained and up to standard. You were required to replace the saltwater chlorinator, replace the pool cleaner, filter flushing and maintenance, lift the brick paving that sunken around the edge of the pool and repair the fence and reset the gates to comply with local Government regulations. This caused delays in preparing the dwelling for sale.

You were required to undertake some electrical works to ensure that an electrical compliance certificate was provided as part of the sale of the dwelling. This caused delays as the works were greater than anticipated.

In late xx 20xx a severe storm caused extensive damage to the dwelling. The garage roller door had been forced out of the tracks and was inoperable. The main power line from the pole was damaged and required repairs. The rear gate had been forced open and bent the frame and hinges. The window awnings at the front were only just hanging on and had to be disassembled, repaired and reassembled. The pool was full of debris and overflowing. These all caused significant delays.

In xx to xx 20xx, you obtained appraisals from local real estate agents with a view to listing and selling. All highlighted the compliance problems and identified various issues and recommended repairs prior to listing to make the dwelling more appealing to families, and particularly those needing to move in immediately.

The compliance issues required contractors to undertake the tasks. This required your personal attendance as executor to ensure that you were fulfilling your obligations as an executor and ensuring the dwelling could be sold. You were required to take time off from your work and travel to the dwelling to do this. This caused some delays. Some contractors were required to attend on multiple occasions due to the nature of the tasks undertaken.

The dwelling was listed for sale with a local real estate agent on xx xx 20xx and you accepted an offer on xx xx 20xx. Settlement took place a short time later.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195