Private ruling: Commissioner's discretion to extend the two year period to dispose of an inherited dwelling
Date of advice: 24 June 2021
Published: September 2021
Ruling period: Year ended 30 June 2021
Date scheme commenced: 6 March 2016

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two year period? Answer Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au

Relevant facts and circumstances: The Deceased's owned a dwelling and lived in it as their main residence ( the Dwelling ). The dwelling was acquired before 20 September 1985. The deceased passed away sometime after 20 September 1985. No income was derived from the Dwelling during the Deceased's period of ownership and the Dwelling has not been used to produce assessable income since their death. Preparations began to ascertain the assets and liabilities of the Deceased in order for a grant of probate application to be made. Within a year of the Deceased's death a caveat was entered at the Probate Registry by Relative A, stopping the application for a common form grant of probate proceeding. That was warned by Relative B, forcing the eventual Supreme Court action to seek to have the Will of the Deceased proved in solemn form. The Court action was commenced by Relative B, seeking for the Court to pronounce for the force and validity of the deceased's last Will. This action was commenced owing to a caveat being entered at the Probate Registry in the relevant State against the issuing of a grant of probate in the Deceased's estate by Relative A. The action was defended by Relative A on the basis that the Deceased did not 'know and approve the contents' of the last Will. Relative C joined the action and also filed a Defence in opposition to probate being granted on the last Will. Shortly after, a Reply and Defence to Counterclaim was filed by Relative B. The matter was resolved at mediation and an Order pronouncing for the force and validity of the Will was made. At the conclusion of that Supreme Court action, an individual was appointed to independently administer the Deceased's estate. Letters of Administration with the Will were granted to the individual as per the Court Order. The Dwelling sold at auction with settlement occurring four and a half years after the Deceased's death.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-195


This ruling applies for the following period: