Private ruling: CGT - deceased estate
Date of advice: 14 August 2025
Published: 20 October 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: 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? | A1: 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'.

Relevant facts and circumstances: The deceased passed away in early 20XX. The deceased acquired an Australian residential property (the property) prior to 20 September 1985. The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time. The property was situated on less than two hectares of land. The two beneficiaries of the estate were you (aged XX) and your sibling (aged XX). Following the death of the deceased there was a time for mourning their death. After this period, you and your sibling contacted your solicitor to finalise the estate, in mid-20XX. The property was initially transferred into your and your sibling's names as tenants in common in equal shares by way of transmission application as per the will of the deceased. Despite this, you and your sibling agreed that the property would be transferred into your sibling's name only. The property is the principal asset of the estate, which was encumbered by a reverse mortgage with an Australian Financial Institution (the Financial Institution). Problems then arose as an original will could not be located - only a copy of the will was available. In late 20XX, you and your solicitor had to contact the Financial Institution, given that it was also determined that they had an interest in the property via secured borrowings the deceased had with them. The Financial Institution refused to refinance the property given the ages of the beneficiaries. As such, you had to arrange for alternate finance to pay out these borrowings and release this security interest from the property. This took an extensive amount of time, along with much negotiation with legal representatives of the Financial Institution. Separate valuations were obtained by both your solicitor and then the Financial Institution which further contributed to this delay. From the time you initially contacted the Financial Institution, the whole process took over 12 months to resolve, which included the period leading up to the eventual transfer of your 50% ownership interest in the property to your sibling. In early-to-mid 20XX, your solicitor then had to make application to the Court for the acceptance of the copy of the will to proceed to probate - this was a delayed process. Probate was eventually granted in mid-to-late 20XX. You then arranged to transfer your 50% ownership interest in the property to your sibling. It was envisaged the abovementioned transfer would be completed prior to two years after the deceased passed away, however the delays in finance and the fact both solicitors closed between late 20XX and early 20XX for the end of year holiday break meant the final transfer of the property was delayed until a few days after two years from the date of death of the deceased. In early 20XX, the transfer of your 50% ownership interest in the property to your sibling took place. No contract or Deed of Arrangement was required to give effect to this property transfer, as the property was transferred to the beneficiaries initially in accordance with the deceased's will.

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