Private ruling: Commissioner's discretion - deceased estate
Date of advice: 4 August 2025
Published: 7 October 2025
Ruling period: Year ending 30 June 20XX
Date scheme commenced: DD MM YYYY

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of 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 DD MM YY, the deceased solely acquired a property located at XX XX XX (the property). On DD MM YY, the deceased passed away. At the time of the deceased's death, the property was the deceased's main residence. The property had not been income‐producing or available for rent at any time throughout the deceased's lifetime or throughout the estate administration. From the date the deceased passed away until the property was sold, the property remained vacant. The size of the property is less than 2 hectares. No capital improvements had been undertaken on this property since the deceased's death. The deceased will, dated DD MM YY, nominated the deceased's wife XX XX as the Executrix of his estate and also nominated his former brother‐in‐law XX XX as an alternative Executor in the event wife could not act as Executrix. On DD MM YY, the deceased divorced his wife XX XX. The deceased did not update his will after his divorce. On DD MM YY, the deceased's niece, XX XX, made enquiries with law firms in and around the deceased's place of residence to determine whether any firms were holding the deceased's will. On DD MM YY, a law firm confirmed with the niece by email that they did hold a will for the deceased which was dated DD MM YY. They also advised the niece that the nominated Executrix was the deceased's ex‐wife. The ex-wife could not act as Executrix due to section 14 of the wills Act 1997 (Vic) precluding her to do so due to the divorce in YYYY. As part of the law firm's response to the niece, they requested information from the niece as to whether she was successful in locating a later will of the deceased. On DD MM YY, the law firm sent a follow up emailed to the niece as they had not received a response to their original email. On DD MM YY XX took over the administration of the estate and started the necessary steps to obtain letters of administration. On DD MM YY letters of administration was granted to XX. On DD MM YY XX started to get the property ready for selling. On DD MM YY, an auction date of DD MM YY was set. On DD MM YY, the property sold at auction with the contract of sale being signed by a representative on behalf of XX as Administrators for the Estate of the deceased. On DD MM YY, the property sale settled. The estate has been fully administered. Reason for delay in disposing the property Between DD MM YY and DD MM YY time spent trying to locate the alternative Executor in the deceased's will, given they were the only party authorised to administer the deceased's estate. A considerable amount of time and resources attempting to locate the named Executrix and alternate Executor in the deceased's will, to no avail. Only until XX had exhausted all avenues in their searches that they contacted XX to take over the administration of the estate. Further due diligence, including performing additional searches, were carried out to satisfy the courts before letters of administration could be obtained. Delays were experienced due to the Covid‐19 pandemic lockdowns in XX which also contributed to the delays in performing the searches for the above persons. Once the letters of administration were granted to XX, XX arranged for the sale of the property within a month of the letters of administration being granted. Council rates and body corporate expenses were in arrears, strictly due to no‐one being authorised to make these payments until such time as letters of administration were appointed to XX. XX listed the property for auction within 3 weeks of receiving the letters of administration for the estate and sold and settled the property just over two months of having received the letters of administration for the estate. At no time was the administration of the estate or the sale of the property not undertaken due to any inactivity by the Executor/Administrator. At no time was the sale of the property delayed to realise a higher sale price when it was finally sold. No capital improvements were undertaken on the property following the deceased's death until the property was sold.

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