Private ruling: Commissioner's discretion - deceased estate
Date of advice: 12 December 2025
Published: 9 February 2026
Ruling period: 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 (ITAA 1997) to allow an extension of time so that the capital gain made on disposal of the dwelling can be disregarded? | A1: Yes. Having considered the relevant facts, the Commissioner is able to apply his discretion under Section 118-195 of the ITAA 1997 and allow an extension of time to the two-year period. The circumstances and reasons as per PCG 2019/5 where we will allow a longer period where the dwelling could not be sold and settled within two years of the deceased's death due to reasons beyond your control that existed for a significant portion of the first two years, were satisfied to allow a discretion beyond the two years after the deceased's death.

Relevant facts and circumstances: The deceased and their spouse jointly purchased a property (the property) prior to 20 September 1985 (pre-CGT). The spouse passed away on XX/XX/20XX. The deceased acquired their spouse's share of the property under the surviving joint tenant rules. The child 1 of the deceased lived in the property with the deceased. The child 1 was the carer for the deceased. The deceased entered into palliative care until passing away within a short period on XX/XX/20XX. The property was the deceased's main residence during the entire period of ownership until passing away. The child 2 informed the solicitor of the deceased's passing. The child 2 advised that they were the executor of the Will. On XX/XX/20XX, the child 2 had a conference with the solicitor to discuss finding a copy of the Will of the deceased. On XX/XX/20XX, the child 2 attended the solicitor's office with a copy of a Will dated XX/XX/20XX. The Will was prepared by lawyers 1. The solicitor rang the number on the Will for lawyers 1. The call was not answered. The solicitor contacted the Law Society who advised that lawyers 1 no longer practice. The child 2 advised that lawyers 2 may have another Will made by the deceased. Lawyers 2 advised they had a Will for the deceased dated XX/XX/20XX, 20 years after the original. The child 1 was appointed as the executor and trustee of the latest Will. On XX/XX/20XX the solicitor had a conference with the child 1. The child 1 signed an authority for the Will to be released to the solicitor's office. Clause 3 of the Will provides the following: 'I give the whole of my estate to my Trustee UPON TRUST as follows: - a) FOR such of them my children, my child 1 and my child 2 as shall survive me for a period of thirty (30) days and if more than one in equal shares as tenants in common. Clause 4 (e) of the Will provides the following: 'ANY of the persons appointed as Executors of this my Will who are a beneficiary may buy or appropriate to himself or herself at a fair value any asset of my estate on the same terms my Executors may grant to a purchaser from my estate'. Four months after the deceased passed away, the child 1 was diagnosed with a terminal illness. Eight months after the deceased passed away, the child 1 was granted probate of the Will of the deceased. The child1 continued to live in the property until passing away in the property within the two years from the deceased passing away. Neither the child 1 nor the child 2 advised of their intentions to purchase the others share of the property as per clause 4 in the deceased's Will. The child 1 had a Will dated XX/XX/20XX. The child 1 appointed their relative 1 (the relative 1) as executor and trustee of their Will. The relative 1 replaced the child1 as executor of the deceased's estate where the executor of executor represents the original testator. On XX/XX/20XX the relative 1 signed a contract of sale on the property. The contract was terminated by the Buyer in the same week of signing the contract. A week later the relative 1 signed a second contract of sale for the property. The contract was due to settle 14 days after the property was registered in the relative 1's name as Legal Personal Representative (LPR) of the deceased's estate. The relative 1 was unable to do this until probate was granted for the child1's estate. Within the following month the relative 1 was granted probate of the Will of the child 1. Settlement occurred on the sale of the property in the following month, approximately 2 years and 2 months after the death of the deceased.

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