Private ruling: CGT - deceased estate
Date of advice: 19 January 2026
Published: 9 March 2026
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner, pursuant to subsection 152-80(3) of the Income Tax Assessment Act 1997 (ITAA 1997), grant an extension of time until 20 June 2025 for the sale of the deceased 50% interest in the property? | A1: Yes. The Commissioner is exercising the discretion under subsection 152-80(3) of the ITAA 1997 to extend the time limit for a CGT event to occur in relation to the deceased's 50% interest in the property, having considered the relevant circumstances that were beyond the control of the deceased estate's executor. • the delay in the application of the letters of administration • the property could not be sold by child C as executor of the deceased estate until the dispute was resolved on DD August 20YY | Q2: Will section 152-80 of the ITAA 1997 allow the executor to apply the small business 15-year exemption to disregard the capital gain made on the disposal of the deceased 50% interest in the property? | A2: Yes. The deceased would have satisfied all the relevant requirements under section 152-105 of the ITAA 1997 in relation to the sale of the property, immediately before their death. The deceased was carrying on a business that was a small business entity just before their passing. The property was used for the entire ownership period, making it an active asset. The property was held for over 15-years prior to the deceased's passing. Accordingly, by operation of section 152-80 of the ITAA 1997, the executors of the deceased's estate are entitled to disregard the capital gain made from disposing of the property in the same way as the deceased would have been able to under subdivision 152-B of the ITAA 1997.

Relevant facts and circumstances: The deceased died on D February 20YY and was over the age of 55. On DD February 20YY, two of the deceased's children, child A and child B, published a notice of intention to apply for letters of administration for the deceased's estate. The deceased owned a property (the property). The deceased and their father each acquired a 50% interest in the property as tenants in common on DD January 19YY. Since acquisition, the property was used by the deceased to operate their business (the business) as a sole trader. Child A and child B did not progress the application for letters of administration, despite numerous correspondence from lawyers (the lawyers), representing the deceased eldest daughter child C to their solicitors to prompt them to do so. The property was listed for sale by child C on D April 20YY on behalf of the deceased estate. The lawyers on behalf of child C published a notice of intention for child C to apply for letters of administration on D July 20YY. On D August 20YY probate was granted to child C, appointing her as executor of the deceased estate. On D February 20YY, the deceased's former spouse filed an application in the County Court against the deceased estate, seeking an interest in the property on the basis of a constructive trust and making a family provision claim. As a result of the former spouse's clam a caveat was placed on the property preventing the settlement A court ordered mediation was held on DD August 20YY in an attempt to resolve the claim and as a result the caveat lodged by the former spouse is to be removed from the property prior to sale. The property was sold on DD June 20YY with settlement occurring on D September 20YY, within two years of child C being granted probate.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 104-10(5) | Income Tax Assessment Act 1997 Division 152 | Income Tax Assessment Act 1997 section 152-10 | Income Tax Assessment Act 1997 section 152-35 | Income Tax Assessment Act 1997 section 152-80 | Income Tax Assessment Act 1997 subsection 152-80(3) | Income Tax Assessment Act 1997 section 152-105