Private ruling: Commissioner's discretion - deceased estate
Date of advice: 20 February 2026
Published: 7 April 2026
Ruling period: Year ending 30 June 20YY
Date scheme commenced: DD/MM/20YY

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 of the dwelling and up to 2 hectares of adjacent land (including the land under the dwelling)? | A1: Yes. Having considered your circumstances and the relevant factors the Commissioner will allow an extension of time. However, the extension only extends to the dwelling and the land to the extent that the land was used primarily for private and domestic purposes in association with the dwelling, up to a maximum area of 2 hectares. Further issues to consider You can apply the main residence exemption to whichever area of land you choose in addition to the land on which your dwelling is situated, however, subsection 118-120(3) of the ITAA 1997 specifies that the total of the land (including the land on which the dwelling is situated) must not exceed 2 hectares.

Relevant facts and circumstances: On DD/MM/20YY, the Deceased passed away. The Deceased died intestate. Under the laws of intestacy, the beneficiaries of the Deceased's estate, were their spouse, Person A, Person B and Person C. At date of death, the Deceased owned a share of a property at XXX (the Property). The Deceased acquired the Property prior to 19XX. The Deceased owned a XX share in the Property as tenants in common with Person D and Person E owning the other share (as joint tenants). The Deceased was residing in this Property with their spouse at time of death. On DD/MM/20YY, Letters of Administration were granted to Person A. On DD/MM/20YY, the Deceased's share of the Property was transferred to show Person A as administrator of the estate. On DD/MM/20YY, a Deed of Family Arrangement was signed by all beneficiaries that allowed the spouse to reside in the Property until they died or was no longer willing or able to reside in the property. In MM/20YY, the deceased's spouse passed away. On DD/MM/20YY, a contract of sale was signed. On DD/MM/20YY, settlement occurred. The Property is greater than 2 hectares. The Property has not been used to produce assessable income.

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