Private ruling: Commissioner's discretion - deceased estate
Date of advice: 19 May 2023
Published: 3 July 2023
Ruling period: Year ending June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner use his discretion to extend the two-year time period in section 118-195(1) (2b) of the Income Tax Assessment Act 1997 (ITAA 1997) and disregard any capital gains made on the disposal of the property in full? | 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: The PROPERTY was purchased by the deceased and his spouse as joint tenants before September 1985. The PROPERTY is less than two hectares. The deceased acquired his spouse's ownership interest in the PROPERTY when his spouse passed away in 1983. The fifty percent ownership was transferred to the deceased on XX XX 19XX. The PROPERTY was the deceased's main residence at the time of death and never used to produce income. The deceased passed away on XX XX 19XX. Under the deceased's will, a life interest was granted to his friend. Upon the death of the of the life tenant his life interest would cease, and the estate would then be shared equally between the remainder beneficiaries, the second cousins of the deceased. The life tenant occupied the residence until death on XX XX 20XX. After the life tenant passed away the PROPERTY remained vacant. The executor was notified of the life tenant's death on XX XX 20XX. A deceased search by the executor on XX XX 20XX verified the date of death of the life tenant and correspondence was issued to the PROPERTY requesting the executor(s) or relatives to make contact. The correspondence was returned-to-sender with the envelope noted as "vacant/deceased" and received XX XX 20XX. On XX XX 20XX, the executor enacted a PROPERTY inspection, a location search of remainder beneficiaries and a search for the life tenant's death certificate. The executor contacted the Hospital (where the life tenant had passed away) on XX XX 20XX in an attempt to identify life tenant's relatives or funeral director. They were advised on XX XX 20XX that the hospital was unable to provide this information due to privacy. The life tenant's belongings remained at the PROPERTY. The executor contacted neighbours to the PROPERTY and were provided details of the solicitor administering the life tenant's estate. The executor wrote to the solicitor on XX XX 20XX requesting contact and clearance of the life tenant's possessions. The executor made a follow up phone call on XX XX 20XX to the solicitor and were advised they were awaiting instructions from their client. They advised their client had not visited the PROPERTY due to Covid 19 restrictions. The life tenant's next of kin telephoned the executor on XX XX 20XX and was informed that the life tenant's possessions remained at the PROPERTY. The relative stated they would discuss with family and then advise the executor on how they wished to proceed. The executor sent a follow up email on XX XX 20XX on the removal of possessions and was advised by email that the beneficiaries would make private arrangements. On XX XX 20XX the executor emailed the solicitor to advise a notice to clear would be issued. Follow up emails between XX XX 20XX and XX XX 20XX were sent to next of kin and a party receiving the life tenant's possessions as a donation requesting an update on progress on clearing the PROPERTY. The PROPERTY was cleared of personal belongings on XX XX 20XX. An estate agent was engaged on XX XX 20XX and the PROPERTY was prepared for sale, including full clean, garden maintenance and PROPERTY valuation for sale purposes. The PROPERTY was listed for sale early in 20XX. The first open inspection occurred a few days later. A contract for sale was signed sixteen days later with settlement to occur on XX XX 20XX.

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