Private ruling: CGT - deceased estates - 2-year discretion - sold
Date of advice: 25 June 2025
Published: 1 September 2025
Ruling period: Year ending XX June 20XX
Date scheme commenced: X July 20XX

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: XX (the deceased's) main residence was located at XX XX, XX ('the property"). The property size is less than 2 hectares. XX, the deceased's spouse acquired the property prior to XX X 19XX. They subsequently undertook substantial modifications, subdivided the property into X strata-titled units, and sold the lower unit. They continued to reside in the remaining upper unit, which is the subject of this application and is specifically referenced in the Last Will and Testament. Sometime after XX X 19XX, the deceased's spouse transferred a XX% interest in the property to the deceased, establishing ownership as tenants in common. The property was the deceased's principal residence throughout the entire period during which it was jointly owned by the spouse. The deceased resided at the property until being diagnosed with a medical condition. After the diagnosis, they were hospitalised for approximately X month before transitioning to residential care at XX. The executors, acting on behalf of the deceased, elected to continue treating the property as the deceased's main residence after the move to residential care. The deceased passed away on XX X 20XX, and probate was granted on XX X 20XX. The deceased's Last Will and Testament appointed X and X as executors of the estate. Should either or both executors be unwilling or unable to fulfil their duties, X, the estate's X, is nominated to assume the role of executor. The deceased's spouse continued to reside at the property until X 20XX, when they relocated to XX due to an increased need for personal care. The deceased's spouse passed away on XX X 20XX, and probate was granted on XX X 20XX. On XX X 20XX, the executors obtained a valuation of the property. Shortly thereafter, they conducted interviews with X prospective real estate agents. X, as executor for the estate sold the property at auction and executed the contract of sale on XX X 20XX. The property sale settled on XX X 20XX. The property was never used to generate assessable income. Neither the deceased nor their spouse maintained any other principal residence after moving into the property. The estate is expected to be fully administered by XX X 20XX, with any capital gain from the property sale to be distributed to the beneficiaries. However, should administration not be completed by that date, the estate will not derive any income or gains other than those arising from the sale of property.

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