Edited version of private advice

Authorisation Number: 5010092920513

Date of advice: 15 June 2023

Ruling

Subject: Two-year discretion

Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time for the Administrator to dispose of the ownership interest in the dwelling owned as trustee of the deceased estate and disregard the capital gain or capital loss made on the disposal?

Answer

Yes

Having considered you 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

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

On XX February 20XX, the deceased, the Sibling A and the Sibling's Partner entered into a contract to purchase the Property. Company A was retained to act jointly for the deceased, the Sibling A and the Sibling's Partner.

Settlement of the Property occurred on XX February 20XX. During the conveyance, the deceased, the Sibling A and the Sibling's Partner instructed Company A that they wished to hold the Property as joint tenants. These instructions were provided to Company A on or about XX February 20XX in the form of a client instructions sheet. This document instructing that the Property was to be held as joint tenants, was received on or about XX February 20XX.

At settlement of the Property on XX February 20XX, Company A received the transfer documents signed by the seller.

The Property has not been used for the purpose of producing assessable income. The Property was the deceased's main residence from date of purchase to date of death. The Property has been the main residence of Sibling A and the Sibling's Partner from date of purchase and continues to be their main residence.

The deceased passed away on XX June 20XX.

The deceased's last Will dated XX November 19XX provided that their estate be divided equally between Sibling A and Sibling B.

On X October 202XX Sibling A applied for Letters of Administration with the Will of the deceased dated XX November 19XX. However, on XX October 20XX, Sibling B lodged a caveat against Sibling A's application for Letters of Administration with the Will.

Settlement was reached with Company B regarding Sibling A and the Sibling's Partner negligence claim against Company A for incorrectly registering the tenancy of the Property as a tenancy in common rather than as a joint tenancy. It was recognised by all of the parties involved in this matter, including the beneficiaries of the estate, that the deceased's 1/3 interest in the Property did not form part of the estate. The tenancy of the Property was incorrectly registered as tenants in common and that the deceased's 1/3 interest in the Property ought to have passed to Sibling A and the Sibling's Partner by survivorship as joint tenants.

A Release Agreement dated XX June 20XX was signed by all parties and set out the basis on which settlement was reached and the document transferring the title from the deceased estate to Sibling A and Sibling's partner occurred.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195