Private ruling: Commissioner's discretion - deceased estate
Date of advice: 16 December 2024
Published: 28 January 2025
Ruling period: Year ended 30 June 20XX | Year ending 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 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 on DD MM 20YY. The property is located at XXXX (the property). The deceased acquired the property before XX September 19XX. The property was situated on less than XX hectares of land. On DD MM 20YY, Probate was granted to the state authority (State Authority). The will of the deceased provides life tenancy to their spouse (Person A), and after Person A's death, the property passes to their children (remainder beneficiaries). Person A resided in the property until they passed away on DD MM 20YY. On DD MM 20YY the remainder beneficiaries contacted State Authority to finalise the estate of the deceased and call for their share in the property. On DD MM 20YY, the remainder beneficiaries engaged a solicitor to assist with legal advice to progress the finalisation of the estate. On DD MM 20YY State Authority transferred the property to the remainder beneficiaries so they each hold an equal interest in the property after the transfer. The beneficiaries did not undertake any renovations to the property, but merely cleaned the property in preparation for sale. On DD MM 20YY the remainder beneficiaries engaged a real estate agent, and the property was placed on the market on DD MM 20YY. On DD MM 20YY the property went to auction but was passed in due to a lack of interest. A second auction was initially scheduled for DD MM 20YY; however, this did not proceed as a buyer was found and a contract of sale was signed on DD MM 20YY with settlement occurring on DD MM 20YY. The property was never income producing.

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