Private ruling: Deceased estate
Date of advice: 28 July 2025
Published: 29 September 2025
Ruling period: Year ended DDMM20YY.
Date scheme commenced: DDMM20YY

Ruling: Q1: Will the Commissioner exercise his discretion under section118-195 of the Income Tax Assessment Act 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.

Relevant facts and circumstances: The property is over 2 hectares. On DDMM19YY the deceased acquired the property. On DDMM20YY the deceased passed away. The property was the deceased's main residence at the time of their passing and was not being used to produce assessable income. The deceased's will appointed their sibling as executor of the estate, or if they were deceased or unwilling, it appointed another family member. Both individuals resided outside of Australia. The will named the deceased's two stepchildren Person A and Person B as joint beneficiaries. The will provided that Person A was to be given the opportunity to purchase the property, and that if they did not wish to then Person B was to be given the same opportunity. The deceased also leased a building they used as their workshop and place of business, referred to as the factory. Person B worked with the deceased at the factory on an ad hoc basis. In the weeks following the deceased's passing a dispute arose between the beneficiaries regarding the contents of the factory. On or about DDMM20YY Person A made an application for letters of administration. On DDMM20YY probate was granted to Person A. Lengthy disagreements in relation to the value and disposal of the property and contents of the factory occurred between Person A and Person B. These disagreements were the subject of protracted court action where the court appointed a separate executor Person C. On DDMM20YY the title of the property was transferred to Person C. On DDMM20YY the property was sold at a public auction. On DDMM20YY the property settled, after the settlement period of X days requested by the purchaser had passed.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 section 149-10