Private ruling: CGT/deceased estate/2 year discretion
Date of advice: 16 August 2025
Published: 20 October 2025
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20YY

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 (including adjacent land up to 2 hectares). Such that you can disregard the capital gain or capital loss you made on the disposal? | A1: Yes.

Relevant facts and circumstances: The deceased acquired the property at xx xx xx in 19YY. The dwelling was the deceased's main residence and never used to produce income. Some land (included in the adjacent land up to 2 hectares) surrounding the dwelling was used for farming. The total property size xx hectares. The deceased passed away on DD MM 20YY. Probate was granted on DD MM 20YY. The deceased's will: • appointed 2 of their children as executors • provided a life interest to their spouse • listed residuary beneficiaries. If any of the residuary beneficiaries predecease the deceased, their share of the estate devolves to the residuary beneficiaries' children. The deceased's spouse passed away on DD MM 20YY. The title was transferred to the residuary beneficiaries as tenants in common on DD MM 20YY. From 20XX, a beneficiary resided at the property to care for their parents. After the deceased's spouse's death, the beneficiary remained at the property. They vacated the property a few months after settlement with the consent of the purchaser. The beneficiary assisted with clearing the property for sale, including removal of livestock and accumulated old farm machinery. There were no refurbishments undertaken on the property. A beneficiary farmed the property until DD MM 20YY The property was sold by the residuary beneficiaries on DD MM 20YY, with settlement occurring on DD MM 20YY.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 109-5 | Income Tax Assessment Act 1997 section 118-120 | Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 section 128-15