Private ruling: Commissioner's discretion - deceased estate
Date of advice: 19 June 2025
Published: 18 August 2025
Ruling period: Year ended DD MM 20XX
Date scheme commenced: DD MM 19XX

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of 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. Paragraph 1.38 of Explanatory Memorandum to the Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures) Bill 2019 explains the main residence exemption remains available to the trustee or beneficiary of a deceased estate, including where the beneficiary is an excluded foreign resident. This includes: • The period the deceased used the dwelling as their main residence; • The two-year period following the deceased's death (or within such longer period allowed by the Commissioner); and • Any period after death where the dwelling was the deceased's spouse's main residence immediately before their death and/or a person with a right to occupy the dwelling under the will (regardless of that spouse's or individual's residency status). 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: In MM 19XX, you moved to Country A and became a Country A resident for taxation purposes. Person A and their sibling each inherited a 50% interest in a dwelling (the property) following the death of a family member pre-CGT. On DD MM 19XX, Person A and Person B purchased the remaining 50% share of the property from Person A's sibling, acquiring it as tenants in common. On DD MM 19XX, Person A passed away. Under the terms of their will dated DD MM 19XX, Person A appointed a third party as the sole executor and trustee of their estate. The will directed that their 50% interest in the property be divided equally between you and Person C. It did not confer any right of occupancy or life tenancy to any individual. The property was Person A and Person B's main residence before Person A passed away and was not used to produce assessable income at that time. On DD MM 19XX, the executor obtained a Grant of Probate for Person A's estate. On DD MM 19XX, the certificate of title issued stated: "Person B holds two undivided one-quarter shares (50%), Person C holds one undivided one-quarter share (25%), and you hold one undivided one-quarter share (25%), as tenants in common." On DD MM 20XX, Person B passed away. Prior to and at the time of their death, the property was Person B's main residence and was not used to generate assessable income. At the date of death, Person B did not hold any other property interests. Under their will dated DD MM 20XX, Person B appointed Person C as the sole executor and trustee of their estate. The will provided that Person B's 50% share in the property be divided equally between you and Person C. It did not grant any right of occupancy or life tenancy to any individual. In MM 20XX, Person C began clearing out Person B's belongings from the property. Between MM 20XX and MM 20XX, Person C cleaned the property and painted the exterior to prepare it for sale. Between MM 20XX and MM 20XX, Person C carried out minor repairs to the property. On DD MM 20XX, Person C obtained a Grant of Probate for Person B's estate. On DD MM 20XX, Person C requested property sale appraisals from several real estate agents. On DD MM 20XX, Person C engaged XX to sell the property. On DD MM 20XX, XX listed the property for sale. On DD MM 20XX, you and Person C (as both executor for Person B's estate and in their personal capacity) entered a contract for the sale of the property. On DD MM 20XX, the property sale settled.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 subsection 128-15(3) | Income Tax Assessment Act 1997 subsection 118-110(4)