Private ruling: Commissioner's discretion - deceased estate
Date of advice: 22 October 2025
Published: 8 December 2025
Ruling period: Year ended DD/MM/20YY
Date scheme commenced: DD/MM/20YY

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: On DD/MM/20YY, the deceased passed away, leaving a will. The will appointed Person A, Person B and Person C as joint executors and trustees. They were also the beneficiaries. At date of death, the deceased owned a property at XXX which was their main residence, which they acquired in 19YY. The property is less than 2 hectares and has not been used to produce assessable income. The property remained vacant from date of death until settlement. On DD/MM/20YY, an application for probate was submitted. On DD/MM/20YY, probate was granted to Person A, Person B and Person C. At this point, disputes arose between Person C on the one part and Person A and Person B on the other part in relation to the division of the estate assets sought by Person C and accounts paid by Person A and Person B on behalf of the deceased estate. Lawyer A acted for the deceased estate. On DD/MM/20YY, Lawyer B instructed Lawyer A they had been engaged to act on behalf of Person C in their capacity as executor and trustee with regards to the Estate of the deceased. They requested a breakdown of funds in the Trust account, and a reimbursement of payments made by Person C on behalf of deceased estate. On DD/MM/20YY, Lawyer C, who represented Person A and Person B, requested a summary of the status of the administration of the estate and summary of assets and progress of realisation and distribution of assets. They also advised Person A and Person B have informed them that Person C is disputing the will and claims to be entitled to a higher distribution. On DD/MM/20YY, Lawyer A provided a copy of original will and probate to Lawyer B. On DD/MM/20YY, Lawyer B requested a breakdown of funds in the Trust account relating to bank accounts and an investment fund of the deceased. On DD/MM/20YY, Lawyer A provided a copy of Trust statement to Lawyer B, showing funds from bank accounts. They add that Person C had advised that they were arranging the collection of funds from the investment fund to then be deposited into Trust account. On DD/MM/20YY, Lawyer A wrote to Lawyer B to advise Person A and Person B have informed them the property has been cleaned and is ready for sale. A draft agency agreement with Real Estate Company A was sent to Person C's solicitor. On DD/MM/20YY, Lawyer B advised that Person C would not consent to the sale of property until they have been reimbursed the costs they outlaid on behalf of the Deceased Estate. They also added that Person C had received the funds from the deceased's investment fund which they deposited into the Trust account on DD/MM/20YY. On DD/MM/20YY, Lawyer A advised Lawyer B that Person A and Person B agree to payments from Trust fund to Person C in the amount of $XXX and Person A $XXX for estate costs incurred by them. They also add that they have located the investment funds deposited by Person C in MM/20YY. On DD/MM/20YY, Lawyer B advised that Person C does not agree to proceed with the full payment to Person A from the trust fund. They would like a copy of insurance documents and evidence of payments they made. On DD/MM/20YY, Lawyer A wrote to Lawyer B confirming they have been instructed to pay Person C $XXX from the Trust fund and will advise when payment completed. A copy of insurance certificate and Trust account statement was provided. On DD/MM/20YY, Lawyer A send Real Estate agency agreement for Person C to sign. On DD/MM/20YY, Lawyer B advised that Person C had conditions to be met with regard to the marketing of the property before they would sign the agency agreement. On DD/MM/20YY, as requested by Lawyer B, Lawyer A forwarded a current Trust account statement, draft and estimate as to the balance of fees for administering the estate and a copy of the agent's marketing schedule and most recent agency agreement. On DD/MM/20YY, Lawyer B advised they were instructed by Person C, that they wish to seek agreement on either of the following. The beneficiaries pay Person C for their share of the property, in the amount of $XXX, and each party release each other from any other future matters, or the balance of the estate be divided equally between all beneficiaries. On DD/MM/20YY, Lawyer A advise that Person A and Person B have instructed they reject the proposal put forward by Person C. They also requested identity documents from Person C to be able to proceed with registering the property in the names of Person A, Person B and Person C as executors of deceased estate. During MM/20YY and MM/20YY, several emails are exchanged between lawyers with regards to a specific piece of the deceased's jewellery which appears to be missing. Person C was left all of the jewellery in the deceased's will. On DD/MM/20YY, a transmission application was registered at the State Land Registry Services recording Person A, Person B & Person C as registered proprietors on title of the property as executors for the Estate of deceased. On DD/MM/20YY, the dispute between executors was resolved. On DD/MM/20YY, Person A and Person B's signed agency agreement was sent to Lawyer B requesting they have their client sign the agreement so that marketing of the property could begin. On DD/MM/20YY, the agency agreement signed by Person C was returned to Lawyer A. On DD/MM/20YY, a contract for sale was signed with Real Estate Company A. On DD/MM/20YY, a contract of sale was signed. On DD/MM/20YY, the purchaser was unable to settle on agreed settlement date and the executors serve notice to complete on purchaser. On DD/MM/20YY, settlement occurred.

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