Private ruling: CGT - deceased estate
Date of advice: 22 April 2026
Published: 13 July 2026
Ruling period: DD MM YY
Date scheme commenced: DD MM YY

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 50% 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 and Person A purchased the property at XXXX on DD MM YY. The property was held as tenants in common in equal shares, with each party holding a 50% interest. The deceased passed away on DD MM YY. Under the deceased's Will, Person A was granted a life interest in the property. This life tenancy legally prevented disposal of the property while Person A continued to occupy the dwelling or retained the capacity to reside there. As a result, the executor, and the beneficiaries were unable to sell the property during the life tenancy period. Following the renunciation of Person B as joint executor, probate was granted to Person C on DD MM YY. The grant of probate was subsequently resealed on DD MM YY, enabling you to administer the property in accordance with the Will. Over time, Person A's health deteriorated significantly, resulting in a loss of capacity. A family member commenced guardianship proceedings, which were necessary before decisions could be made regarding Person A's ongoing accommodation and the future of the property. On DD MM YY, you were advised that Person A had lost capacity and that an urgent application had been made to the relevant tribunal for guardianship and administration orders. On DD MM YY, you were informed that Person D had been appointed as guardian, administrator, and medical treatment decision maker for Person A. Following the appointment of a guardian, Person A vacated the property and entered permanent residential care around DD MM YY. This effectively terminated the life tenancy and removed the legal restriction on disposal. Only at this point, were you and the guardian able to proceed with preparations for sale. Once the property became available for disposal, it was found to be in a severely deteriorated and unsaleable condition. Issues identified included extensive accumulation of refuse associated with hoarding behaviour, damaged floor coverings caused by multiple pets, and an active termite infestation. Specialist contractors were engaged to remove accumulated waste and to treat the termite infestation. No improvements or renovations were undertaken. The works were limited to making the property capable of being sold, and it was offered for sale on an "as is, where is" basis. A real estate agent was appointed by agreement of the parties on DD MM YY. The property was listed for sale around DD MM YY. After limited market interest, the asking price was reduced. A purchaser was secured, and the property was sold on DD MM YY, with settlement occurring on DD MM YY.

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