Private ruling: Commissioner's discretion - deceased estate
Date of advice: 14 December 2023
Published: 5 February 2024
Ruling period: Income Year ended 30 June 20XX | Income Year ended 30 June 20XX
Date scheme commenced: 1 July 2020

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 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: In XX 20XX, Person A passed away. As at the date of death, Person A owned the property. The property consisted of two lots. The dwelling used by Person A as their main residence was located on the first lot and the driveway access to the dwelling was on the second lot. The lots had a combined area of less than 2 hectares. Person A left a will appointing Person B as their executer and providing, inter alia, that: • Shares in a family company were to go to relatives of Person A. • The property was to go to Person B. On XX XX 20XX, probate of Person A's estate was granted to Person B. In XX 20XX, Person B engaged accountants for assistance in administering Person A's large and complex estate. It was identified that there were errors in Person A's will that required rectification to ensure that the distribution of assets reflected Person A's intentions. In XX 20XX, Person B lodged an initial summons with the Supreme Court seeking judicial advice on the administration of the estate. Shortly thereafter, the lots were transferred to Person B. On XX XX 20XX the Court made orders as to the proper construction of Person A's will. Following this, Person B sought tax and legal advice on any potential CGT implications upon the distribution of the estate's assets to ensure that the entitlements of the relatives were fully satisfied prior to the sale of the property. This advice was received in XX 20XX. In XX 20XX Person B engaged a real estate agent to sell the property which subsequently occurred in XX 20XX. Due to the nature of the property, the purchaser requested a longer settlement which occurred on XX XX 20XX. The administration of the estate was further hindered by Person B's caring responsibilities for their sibling until their death in XX 20XX. Person B was also diagnosed with XX in 20XX. In XX 20XX, Person B passed away.

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