Private ruling: CGT - deceased estate
Date of advice: 1 December 2025
Published: 27 January 2026
Ruling period: DD MM YY
Date scheme commenced: DD MM YY

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? | 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: On DD MM YY, the deceased acquired the property located at XXXX. The property was acquired solely by the deceased and was used as his main residence from the date of acquisition until their death. The property is less than two hectares in size and was never income-producing or available for rent before or after the deceased's death. The deceased did not own any other property at the time of their death. On DD MM YY, XX days prior to their death, the deceased executed a Will appointing Person A, as the Executor. On DD MM YY, the deceased passed away at Medical Centre A, where the deceased was receiving treatment for an illness diagnosed on DD MM YY. On DD MM YY, the Executor advertised their intention to apply for a Grant of Probate. On DD MM YY, one of the deceased's offspring, Person B, advertised their intention to apply for Letters of Administration and lodged an application on DD MM YY. Person B withdrew their application on DD MM YY upon learning of the deceased's Will. On DD MM YY, Lawyer 1 lodged a Probate application on behalf of the Executor. On DD MM YY, the Probate Office requisitioned the application, requesting corrections and medical evidence of the deceased's testamentary capacity. An affidavit of due execution was lodged on DD MM YY, however, medical evidence remained outstanding. On DD MM YY, the Executor engaged Lawyer 2 due to a dispute with Lawyer 1. On DD MM YY, Lawyer 2 advertised the Executor's intention to apply for Probate. On DD MM YY, Lawyer 2 obtained the deceased's medical records from Medical Centre A. After reviewing the records and correspondence from Person B's solicitors, Lawyer 2 advised the Executor to apply for Letters of Administration instead. On DD MM YY, the original Probate application was discontinued. On DD MM YY, Lawyer 2 lodged an application for Letters of Administration, which was refused on DD MM YY as the deceased had left a Will. On DD MM YY, the Executor engaged Lawyer 3 on a deferred fee basis. On DD MM YY, Lawyer 3 advertised the Executor's intention to apply for Probate. Between DD MM YY and DD MM YY, Lawyer 3 attempted to obtain an affidavit from the deceased's treating doctor confirming testamentary capacity; however, Medical Centre A advised that no assessment had been conducted and no doctor was willing to provide an affidavit. In the absence of medical evidence, Lawyer 3 reviewed the deceased's medical records and prepared an affidavit summarising them. On DD MM YY, Lawyer 3 filed the Probate application. On DD MM YY, the Registrar requisitioned the application, requesting affidavits from the solicitor who prepared and witnessed the Will. On DD MM YY, Lawyer 3 wrote to Lawyer 1 seeking an affidavit regarding the deceased's capacity. The affidavit from Lawyer 1 was received on DD MM YY and lodged with the Supreme Court. On DD MM YY, the Grant of Probate was issued to the Executor. Following the grant, the Executor commenced administering the estate, including engaging a sales agent to market the property. The property was listed for auction on DD MM YY and sold on that date, with settlement occurring on DD MM YY. No capital improvements were made to the property after the deceased's death until its sale.

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