Private ruling: the Commissioner's discretion to extend the two-year time limit to dispose of a dwelling
Date of advice: 29 July 2025
Published: 29 September 2025
Date scheme commenced: 1 July 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' . This private ruling applies for the following period Year ending 30 June 20YY The scheme commenced on: 1 July 20YY


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


Relevant facts: The deceased passed away on DDMM20YY. | The deceased owned a dwelling. (The dwelling). | The dwelling was the main residence of the deceased and was never used to produce assessable income. | The land size is less than 2 hectares. | In the Will of the deceased there were two executors. Executor 1 (you) and Executor 2. | Executor 2 is a solicitor and prepared the Will. | You and your child resided in the dwelling from DDMM20YY until settlement. | The deceased was xx at this time and was quite independent. However, it became apparent that the deceased was suffering from a medical condition although at this stage no medical diagnosis was obtained. | The deceased had a fall at the dwelling and was taken to hospital as a result. The deceased had suffered a broken bone and required surgery which was successful. The hospital formally diagnosed a medical condition. | The hospital arranged for an aged care assessment and the deceased was assessed as being entitled to high level residential care. | The deceased was offered a place in a residential care unit and moved in. On the second day the deceased had another fall which resulted in a wound that became infected and turned septic. The deceased passed away at hospital. | During the deceased's period of ongoing medical illness, you were undergoing an acrimonious and protracted divorce. Your general practitioner diagnosed you with a medical condition and you were referred to a specialist. You left work a short time later to deal with your health issues. You had a mental health care plan. | You were unable to work for a period of time. You did obtain some work through an employment agency after the death of the deceased. | In DDMM20YY you commenced an online application for probate and contacted Executor 2 requesting the original Will as it was held by them. | A dispute ensued between you and Executor 2 about who was going to apply for a grant of probate. This caused significant delays in administering the estate and in obtaining a grant of probate. | In late 20YY your family law proceedings were resolved. | Due to the difficulties, you experienced with Executor 2, you approached local solicitors to see if anyone would be able to assist you in resolving the dispute. | You were able to locate a legal representative (person A) who agreed to assist you in negotiating with Executor 2. You met with person A around DDMM20YY to discuss a resolution. | It was ultimately agreed that Executor 2 would apply for a grant of probate and this was filed on DDMM20YY. | The grant of probate issued a short time later. | You and Executor 2 were unable to agree on a valuation of the dwelling or a listing agent. | You considered engaging the services of a vendor's agent to sell the dwelling. Person A advised against this as Executor 2 might consider this a unilateral decision and commence legal proceedings to have you removed as an executor. | You obtained a number of market appraisals from real estate agents in MM20YY. You and Executor 2 were able to agree on a listing agent. | The dwelling was listed for sale by auction. | You and Executor 2 agreed to sell the dwelling prior to auction. | A contract for the sale was signed on DDMM20YY. | Settlement took place on DDMM20YY.