Private ruling: Commissioner's discretion - deceased estate
Date of advice: 27 July 2022
Published: November 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion to allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain or 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 during the 20XX income year. The deceased left a property in his estate. The deceased had inherited the property from his parent's estate approximately XX years ago and used the property as their main residence from the start of their ownership period until their date of death. They made no capital improvements on the property. The property was never used by the deceased or the estate for income producing purposes. The property was less than 2 hectares. State Trustees Limited (STL) was contacted a week after the deceased's passing regarding the estate. The deceased was survived by Sibling A, Sibling A's child and Sibling B's child. Approximately 2 months after the deceased death, STL received authority from Sibling B's child to make an application for letters of administration for the estate. STL then engaged Company A, to attend to the property to inspect, clean and try to locate the deceased last will but no will was found. Approximately 5 months after the deceased death, STL was contacted by Law Firm A, acting on behalf of the deceased's friend, that they intend on making a claim on the deceased's estate. In the correspondence from Law Firm A, it was stated that the deceased's friend was the domestic partner of the deceased. Due to this statement, the application for letters of administration was delayed until the authorised person to provide instructions to STL was established. Approximately 7 months after the deceased death, STL was granted letters of administration upon intestacy of the deceased. 3 months later a genealogy report for the deceased determined that only Sibling A and Sibling B's child would benefit under intestacy in equal shares. Sibling A's child was excluded from the deceased's estate as a beneficiary. Over the course of 6 months, STL engaged in resolving the claim from the deceased friend, its validity and resolution between all parties. It was agreed that the claim will be finalised after the sale of the property is settled. STL attempted to locate the original certificate of title. STL discovered that the original certificate of title and original will of the deceased from Law Firm B were being held by Law Firm C. Approximately 18 months after the deceased death, an email copy of the will was received from Law Firm C. The will named Sibling A's child as the sole executor and sole beneficiary of the deceased's estate. Approximately 2 weeks later, STL received authority from Sibling A's child to apply for a grant of probate of the deceased's will once the letters of administration is revoked. Approximately 1 year and 10 months after the deceased death, STL applied for revocation of the letters of administration. Approximately 1 month later authenticated revocation orders were made by the court. STL waited for necessary information from external parties to include in the probate application. Approximately 3 months later a new grant of probate was received. Following the grant of probate, STL immediately took possession of the property and commenced its process to put the property on the market. STL engaged a company to clean the property, a company to provide sworn valuation, and a company to arrange the sale. The property was first auctioned approximately 2 years and 5 months after the deceased death, however, was unable to be sold due to no interest from any buyers. The property was sold as a private sale a month later with settlement taking place approximately 2 years and 9 months after the deceased's death.

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