Private ruling: CGT - deceased estate
Date of advice: 15 September 2022
Published: December 2022
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 2020

Ruling: Q1: Will the Commissioner exercise their discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to extend the two-year period to dispose of the dwelling? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 66057' on ato.gov.au.

Relevant facts and circumstances: During 20XX, the deceased had been travelling overseas for a few months and returned home. Following the deceased's return they were not responding to phone calls or knocks at their door. Approximately six days later, you contacted police who met you at the deceased's home before breaking in and finding the deceased dead. You were present and identified them. The deceased's death was unexpected. The Coroner's Office staff attended the deceased's home and informed you that it would be a few days before the deceased's body could be released in preparation for the funeral. You and your siblings contacted the funeral home and finalised funeral arrangements pending the release of the deceased's body from the Coroner's Officer. You contacted the funeral home a week later to confirm arrangements and they refused to deal with you and your siblings due to the instructions of the executors. Despite numerous contacts, including from close relatives, the executors still refused you and your siblings any say or involvement in the funeral. You and your siblings believed the executors were not fulfilling their role of executing the deceased's wishes in accordance with the will. You contacted a solicitor approximately 1 week after the deceased's death. The deceased was laid to rest approximately 1 month after their death. You, and your siblings, were beneficiaries of the deceased's estate according to the will. The estate was primarily two properties. One was the deceased's main residence and the other was an investment property. Through your solicitor, you pursued to resolve the deceased's estate quickly through the executor's solicitors. The executors were slow responding and their solicitor had issues with them complying in a timely fashion. During this period you paid all costs for the estate, including the executor's solicitor. You never delayed payments. Probate was granted approximately 8 months after the deceased death. You engaged a real estate agency around this time but at that stage you did not have the rights to sell the property. You requested your solicitor start formal legal proceedings to remove the executors and appoint you and your siblings, as it was nearing 2 years from the date probate was granted. The matter went to court and the judgement was made that you and your siblings would become the executors to the deceased's estate approximately 2 years and 7 months after the deceased death. You then enlisted the real estate agent to sell the property. However, the property was not in a presentable state at that time. Due to the covid-19 lockdowns the property had not been maintained appropriately. Once restrictions eased you engaged trades people to attend to the property, but it was difficult to get this done quickly. Once this was completed the real estate agency took photos and listed the property on the market. The agency advised it was best to sell the property via auction. The property was marketed for 4-6 weeks and the property auction was scheduled for mid 20XX. Within a week before the auction, a covid-19 lockdown was enforced, and the auction had to be cancelled. The property was then able to be sold through an online auction on 1 week after it was first scheduled. The purchaser requested a 120 day settlement.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 118.195