Private ruling: CGT - deceased estate
Date of advice: 7 April 2025
Published: 10 June 2025
Ruling period: Year ended 30 June 202X
Date scheme commenced: 1 July 202X

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 property, which is situated in xx xx xx, xx, xx is part of the deceased estate. It was purchased by the deceased in 19xx. The property is less than 2 hectares. The deceased passed away on DD MM 20XX. The property was the deceased's main residence and never used to produce income. The deceased estate has not yet been fully administered The deceased's will names their children E and W as executors. E is not provided for under the will. In MM 20YY, E's lawyers formally notified that E would not be applying for probate and could not act as executor due to their intention to challenge the will. Consequently, probate was applied for in MM 20YY by W. The delay in W applying for probate was due to W's serious health conditions and the impact of the Covid-19 pandemic. The sole executor W passed away in MM 20YY. The originating motion to challenge the will was filed with the Supreme court on DD MM 20XX, naming W as the defendant, which was amended following the death of W, naming N (W's child) as the defendant. Probate was granted with N as the sole executor of W's estate on DD MM 20XX and subsequently N also became executor of the deceased's estate In MM 20YY, E's lawyer had engaged counsel to prepare the amended originating motion and associated documents such as Affidavit in support and Summons On DD MM 20XX, E filed the originating motion. Court hearings followed until the mediation, where the matters were settled on DD MM 20XX. E lived at the property from DD MM 20XX until DD MM 20XX. W did not give E permission to live there after the deceased's death. W only discovered E had been living there later, through the electricity bills. In MM 20YY, N was registered as the proprietor under executorship. N had been attempting to obtain the keys for the property from E but only received them in MM 20YY. N arranged for gardening, furniture and rubbish removal. The property was listed for sale in MM 20YY and went for auction in MM 20YY. The contract of sale for disposal of dwelling was signed on DD MM 20XX. Settlement took place on DD MM 20XX.

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