Private ruling: CGT - deceased estates
Date of advice: 27 October 2025
Published: 15 December 2025
Ruling period: Year ending 30 June 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 apply the discretion under subsection 118-195(1) of the ITAA 1997 to allow an extension to the 2-year time limit.

Relevant facts and circumstances: The deceased purchased the property at XXXX in or around MM 20YY. The property is less than 2 hectares. The deceased passed away on DD MM 20YY. The property was the deceased's main residence and never used to produce income. The deceased resided at the property with their two children, child A and child B, and de facto partner. The deceased's will appoints their de facto partner as executor and their children as executors in reserve. The deceased's will provides a right to reside at the property to their children and de facto partner for a period of two years from the date their death. Upon the sale of the property at the end of two years, the will directs 50 per cent of the value of the estate be used to purchase a property in the names of the children and provides a right to reside at this property to the children and the de facto partner, until the death of the de facto partner. The residuary of the estate to be divided between the two children. On DD MM 20YY child A sent a text message to the executor regarding administration of the estate. They received a response from the executor that they would attend to the paperwork regarding disposal of the property. On DD MM 20YY child A requested a meeting with the executor regarding sale of the property via text message and follow up messages on DD MM and DD MM 20YY. They did not receive a response to the messages. On DD MM 20YY child A met with police at the property. Later that day, child A was contacted by the police to advise they had located the executor and they were all right. On DD MM 20YY child A contacted the executor to advise they would be removing their belongings from the house. On DD MM 20YY the executor contacted child A to advise they would send an email. On DD MM 20YY child A received an email regarding which belongings could be removed from the property. On DD MM 20YY child A sent a text message to the executor asking if they still wished to administer the estate. They did not receive a reply. On DD MM 20YY child A filed an application for Grant of Probate. On DD MM 20YY child A received a notice of requisition from the Supreme Court. On DD MM 20YY legal representation for child A filed a response to the requisition. On DD MM 20YY child A received a second requisition from the Supreme Court. On DD MM 20YY legal representation for child A filed a response to the second requisition. On DD MM 20YY child A sent a text message to the executor advising they could not access the property. Child A did not receive a reply. On DD MM 20YY child A was granted probate as a substitute executor under the deceased's will due to the incumbent executor having refused to act. Leave was reserved to the other substitute executor. On DD MM 20YY child A contacted the de facto partner to advise they had been granted probate and would be proceeding with sale of the property and requested they remove their belongings from the property. On DD MM 20YY child A engaged a locksmith to gain entry to the property. On DD MM 20YY child A met with a real estate agent and arranged for repair to an air-conditioner at the property. On DD MM 20YY child A contacted a conveyancer to have the title of the property changed to their self as executor for the estate. On DD MM 20YY child A again contacted the de facto partner regarding removal of their belongings. On DD and DD MM 20YY the property was cleaned, garden tidied and belongings sorted in preparation for sale. On DD MM 20YY the title was transferred to child A as executor for the estate. On DD and DD MM 20YY further work was done at the property in preparation for sale. On DD MM 20YY a new air-conditioner was installed at the property. On DD and DD MM 20YY preparation of the property for sale was completed and all belongings removed. The property was listed for sale on DD MM 20YY and sold on DD MM 20YY, with settlement occurring on DD MM 20YY.

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