Private ruling: Commissioner's discretion - deceased estate
Date of advice: 19 August 2024
Published: 30 September 2024
Ruling period: Year ended XX XXXX 20YY
Date scheme commenced: XX XXXX 20YY

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of 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 XX XXXX 20YY, the deceased passed. The deceased acquired the dwelling (the property). The property is less than 2 hectares in size. The property was the deceased's main residence at the time of their death and was not used to produce assessable income. The deceased had X children: person A, person B and person C. Person C predeceased the deceased. On the XX XXXX 20YY, the deceased's last Will and testament executed: • Person A the sole Executor of their Will and bequeathed the whole of their estate both real and personal to them solely. • If they should predecease, they made person D substitute executor and bequeathed the whole of their estate both real and personal to them. On XX XXXX 20YY, the first probate caveat was filed against the estate by person E, a person known to the deceased. On XX XXXX 20YY, the Executor received a letter from a legal representative stating they are instructed by person B, person F and person E (the other parties) asserting the grounds of the caveat stating the Will was invalid due to the incapacity of the deceased. On XX XXXX 20YY, the second probate caveat was filed against the estate by person B. On XX XXXX 20YY, the legal representative filed an affidavit in court on behalf of the other parties. On XX XXXX 20YY, first offer of settlement was made by the Executor. Between XXXX 20YY and XXXX 20YY, the associated parties exchanged numerous offers of settlement and attended numerous court hearings trying to resolve the estate matters. On XX XXXX 20YY, the executor made first contact with a real estate agent for the sale of the property, despite the grant of probate not being administered at this point. On XX XXXX 20YY, an offer of settlement was accepted between the parties. On XX XXXX 20YY, the Executor and the other parties signed a deed of settlement. On XX XXXX 20YY, the Court ordered the Probate Registry caveats over the estate of the deceased to be discontinued. On XX XXXX 20YY: • The Court granted probate. • The Executor directed the real estate agent to commence advertising the property for sale. The property remained vacant throughout the court proceedings, there were no repairs or improvements to the property after the passing of the deceased. On XX XXXX 20YY, the contract of sale was signed. On XX XXXX 20YY, settlement occurred.

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