Private ruling: Commissioner's discretion - deceased estate
Date of advice: 19 July 2022
Published: October 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

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 and disregard the capital gain or 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: At some time before 1985, the deceased purchased the property. The deceased was the sole owner of the property. The property was situated on less than two hectares of land. The deceased moved into a nursing home and passed away approximately six months later. Shortly after, a close contact contacted a Public Trustee to arrange an administrator for the estate. The deceased had no immediate family members in Australia. The Public Trustee managed to locate a relative located overseas. However, the relative did not want to be appointed for the role and requested the Public Trustee to administer the estate. The relative signed a letter authorising the Public Trustee to administer the estate. The letter authorising the Public Trustee to administer the estate was received by the Public Trustee shortly after it was signed. Around three months later, the Public Trustee was granted probate. The Public Trustee commenced taking action to put the property on the market. The Public Trustee appointed a valuator to obtain a valuation on the property and a cleaner to prepare the property for sale. Around four months after probate was granted, the Public Trustee appointed a real estate agent to sell the property. The property was listed for sale around month later. Approximately two months later, the property was sold under a contract of sale. The property was expected to be settled around two months after the contract was signed. However, the purchaser encountered issues obtaining approval for a loan. The purchaser requested an extension to obtain loan approval on two occasions. The extensions were approved by the Public Trustee. Approximately two months after signing the contract, the Public Trustee was informed the purchaser's loan was declined and the purchaser requested the deposit be refunded. Proof of rejection was provided to the Public Trustee on the same month and the deposit was refunded to the purchaser. The Public Trustee engaged the real estate agent to sell the property as soon as possible but were advised there was there were unfavourable market conditions at the time. Approximately two months later, the property was sold under contract. Settlement occurred one month after the property was sold. The property was left vacant for the whole period from the deceased's date of death until settlement date.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 118-195