Private ruling: Commissioner's discretion - deceased estates
Date of advice: 12 October 2022
Published: December 2022
Ruling period: The year ended 30 June YYYY
Date scheme commenced: 1 July YYYY

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 (the property) 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 deceased passed away on DD/MM/YYY. The deceased purchased the property jointly with their spouse before 20 September 1985. The property was situated on less than two hectares of land. The deceased was survived by their spouse and their adult children. Prior to the deceased's death, the deceased began suffering a medical condition and subsequently moved into a nursing home with their spouse. Prior to the deceased's death, ownership of the property was changed and subsequently challenged, leading to court proceedings. At the time of the deceased's passing, ownership in the property was held 50% by the deceased and 50% by one of the deceased's children (the other 50% owner). Following the deceased's death, a dispute arose regarding the validity of the deceased's will. This caused the grant of probate to the Executor to be delayed for several years. Following the grant of probate, one of the deceased's children contested the will, bringing a claim for further provision from the deceased's estate. This claim was resolved by mediation, however the deceased's spouse passed away prior to the relevant agreement being executed. This caused further delay. A dispute then arose between the beneficiaries and the other 50% owner regarding the management of the property sale. Once this was resolved, the Executor arranged for sale of the property. From the deceased's date of death until settlement of the sale of the property, repairs of a maintenance nature only were undertaken to the property. A contract to dispose of the property was entered into, with settlement occurring on DD/MM/YYYY.

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