Private ruling: Deceased estate
Date of advice: 4 October 2018
Published: November 2018
Ruling period: Year ending 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain or loss you make on the disposal? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au

Relevant facts and circumstances: The deceased purchased a property after 20 September 1985 and this property was the deceased main residence at the time of their death. The deceased died intestate. A relative of the deceased applied for probate and was named as the executor in the letters of administration. The deceased was in debt at the time of their death. The property was rented out to cover the mortgage repayments and other debts relating to the property. The property was placed onto the market, but due to little interest in the property, the price was dropped several times during the execution of the estate. During the execution of the estate the executor had to attend severe family problems. During this time his/her parent died and he/she was the executor of the parent’s estate. In early 20XX, the solicitor contacted the executor, informing them that the property was to be auctioned. The solicitor also stated that they were awaiting confirmation from the bank that they would accept a reduced amount in settlement as there would likely be a shortfall of funds. After some discussion between the solicitor and the bank, the solicitor contacted the executor and informed them that the firm would no longer represent the Estate as their fees remained unpaid and it was unlikely they would be recouped from the sale of the property. After contacting the real estate agent and informing them of the situation, the agent arranged a meeting between the executor, the agent, and a bank representative, to organise the sale of the property. This lead to the property being listed on the market. The property was sold with settlement occurring in early 20XX.

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