Edited version of private advice

Authorisation Number: 5010113536211

Date of advice: 14 May 2025

Ruling

Subject: Deceased estate

Question

Will the Commissioner exercise his discretion under section118-195 of the Income Tax Assessment Act 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.

This ruling applies for the following period:

Year ending XX XXX 20XX.

The scheme commenced on:

XX XXX 20XX.

Relevant facts and circumstances

The property is located at Address A.

The property is less than 2 hectares.

On XX XXX 20XX the deceased had a share ownership in the property as tenants in common with Person A who acquired the remaining share.

In 20XX Person A moved out of the property

On XX XXX 20XX the deceased made a will revoking all others.

On XX XXX 20XX the deceased passed away.

The property was the main residence of the deceased until their passing.

On XX XXX 20XX Person B contacted Trustees A, as executors under the will, to report their death. Trustees A posted paperwork to Person B on the same day for completion and formal reporting of their death.

On XX XXX 20XX Person B contacted Trustees A to advise that while they had not yet completed the information required, they planned to do so shortly.

On XX XXX 20XX the completed paperwork had been received and Trustees A was able to formally accept the estate for administration.

On XX XXX 20XX the death certificate was requested.

On XX XXX 20XX the death certificate was obtained. This noted Disease A as one of the causes of death. This raised the question of the capacity of the deceased.

On XX XXX 20XX a letter was sent to the deceased's doctor to confirm if the deceased had testamentary capacity at the time they made their will.

On XX XXX 20XX a follow up letter was sent to the doctor to confirm if the deceased had testamentary capacity at the time they made their will.

On XX XXX 20XX the doctor provided a letter confirming testamentary capacity up until XX XXX 20XX, however declined to sign an affidavit testifying that they had testamentary capacity beyond that as this was the last time they saw them.

On XX XXX 20XX legal instructions were sent to investigate capacity and obtain a grant of probate.

On XX XXX 20XX letters were sent requesting medical records.

On XX XXX 20XX the medical records were provided.

On XX XXX 20XX an application was made to the court for grant of probate. Person A's ownership share is identified.

On XX XXX 20XX probate was granted.

On XX XXX 20XX an internal request for an address search for Person A is made.

On XX XXX 20XX the search results in a possible address for Person A and a letter is issued.

On XX XXX 20XX and internal referral to Trustees A's intestacy estate unit is made.

On XX XXX 20XX the report from the intestacy estate unit is received which identifies that Person A predeceased Person B. It is identified that their family were unaware of their passing and their estate had not been administered.

On XX XXX 20XX Trustees A accepted administration of Person A's estate in order to be able to sell the property.

On XX XXX 20XX Trustees A received property disposal instructions from the beneficiaries of the deceased's estate.

On XX XXX 20XX Trustees A received property disposal instructions from the beneficiaries of Person A's estate.

On XX XXX 20XX the title of the property was transferred to Trustees A as legal representatives for the estates.

On XX XXX 20XX it was confirmed that since Trustees A was already registered as the legal representatives for the estate of Person A, the property exchange would not allow use of electronic lodgement to lodge the authority for the deceased's estate. It would require paper lodgement.

On XX XXX 20XX a requisition notice was received from Titles State A due to the deceased's name being different across several documents, including the title.

On XX XXX 20XX additional documents were gathered to prove that the individual identified on the title was the same as the deceased in order to answer the requisition notice which was lodged via electronic lodgement.

On XX XXX 20XX a second requisition notice was received from Titles State A requiring further information.

On XX XXX 20XX that requisition was answered and lodged.

On XX XXX 20XX a registration confirmation statement was obtained showing the owners of both shared interests in the property were now Trustees A and preparations for sale could proceed.

On XX XXX 20XX an approval to sell is signed

On XX XXX 20XX instructions to sell were signed by the public trustee and sent to public trustee office.

On XX XXX 20XX an external real estate agent was appointed.

On XX XXX 20XX the external agent conducted a building and pest report in preparation for sale and found live termite action.

On XX XXX 20XX Trustees A requested a copy of the building and pest report.

On XX XXX 20XX the external agent provided the building and pest report.

On XX XXX 20XX the first open house was held. Multiple offers were received.

On XX XXX 20XX a written offer was received and referred to beneficiaries.

On XX XXX 20XX the offer was accepted by the beneficiaries.

On XX XXX 20XX the offer was withdrawn by the buyer due to the issues on the building and pest report.

On XX XXX 20XX two further offers were made on property. The buyers were notified of multiple offer situation and were told to put their best offers forward.

On XX XXX 20XX one of the buyers pulled out. The other buyer requested a second viewing of the property.

On XX XXX 20XX the buyer viewed the property a second time and withdrew their offer.

On XX XXX 20XX another offer was received, and the beneficiaries accepted the offer.

On XX XXX 20XX it was advised that the offer was accepted.

On XX XXX 20XX the contract of sale was signed with settlement set for XX XXX 20XX.

On XX XXX 20XX settlement could not take place that day. Settlement was moved to XX XXX 20XX.

On XX XXX 20XX the mortgagee solicitor had not received the release of mortgage from bank in the mail. Settlement was extended to XX XXX 20XX.

On XX XXX 20XX settlement took place.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-195