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Edited version of private advice
Authorisation Number: 1052416550839
Date of advice: 3 July 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 ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The Deceased purchased a house (the Property).
The Property is less than 2 hectares in size.
The Property was the main residence of the Deceased just before her death and was not used for the purpose of producing assessable income.
The Deceased had several beneficiaries.
On DD MM YYYY, the Deceased passed away.
2 beneficiaries were appointed as the Executors of the Deceased's estate in accordance with their will (The Will).
Following the Deceased's death, the Property was used as the main residence of a separate beneficiary (Beneficiary A). Beneficiary A had previously been residing with the deceased and caring for them. Beneficiary A passed away within a short timeframe of the deceased's death.
A clause of the Deceased's will provided that the Property was to be sold and a percentage of the proceeds were to go to purchasing an appropriate property for Beneficiary A. The remaining percentage was to be distributed between all other beneficiaries.
On DD MM YYYY, probate was granted.
On DD MM YYYY, the Property was transferred to the joint executors (Executor 1 and Executor 2).
In accordance with Beneficiary A's will, Executor 1 was appointed as the Executor and sole beneficiary of Beneficiary A's estate.
Following Beneficiary A's death, the Property was left vacant pending agreement between Executor 1 and Executor 2 on how to distribute the sale proceeds of the Property.
On DD MM YYYY, an agency agreement was made with a real estate agent to sell the Property.
However, the Property remained off-market while some outstanding issues were resolved with Beneficiary A's will and a deed of family arrangement was finalised.
On DD MM YYYY, an agreement was made with the Agency to advertise at a reduced price due to market conditions. The Property was placed on the market on the same day.
On DD MM YYYY, you accepted an offer.
On DD MM YYYY, contracts were exchanged with the buyer and settlement date set for DD MM YYYY.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195