Private ruling: Commissioner's discretion - deceased estate
Date of advice: 5 September 2025
Published: 27 October 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of Income Tax Assessment Act 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: The deceased passed away on XX/XX/20XX. The deceased passed away intestate as the family and lawyers could not locate a valid will. They located an unsigned informal will drafted in 20XX (draft will). The deceased's children were Person A, Person B, Person C and Person D. The deceased acquired the property with their spouse as joint tenants after 20 September 1985. At the time of the deceased's death, the property was not used to produce assessable income. The property was situated on less than 2 hectares of land. A clause in the deceased's draft will provided that the property was to be given to Person B if not already gifted to them within the deceased's lifetime. On XX/XX/20XX, the deceased's spouse passed away. The deceased received their spouse's interest as the surviving joint tenant. In 20XX, the deceased moved into the property. On XX/XX/20XX, the deceased moved out of the property to live with Person A due to their health issues. The deceased continued to treat the property as their main residence until their death. After the deceased vacated the property, Person B and Person C continued to live at the property rent free. On XX/XX/20XX, Person B passed away intestate. Person A supported Person B's child, Person E during this time and assisted them to locate Person B's paperwork which was kept at the property. Solicitors also needed to identify and collect Person B's possessions. Plans to sell the property could not be made until Person B's estate was administered. Following Person B's passing, there was a dispute amongst the siblings as to how the final distributions of the property would be divided. Person E intended to purchase and move into the property. Person E was expecting to receive some entitlements from Person B's estate. Person A was supportive of this and attempted to preserve the property for them. Person A and Person D intended to contribute some funds to assist in making the purchase price more achievable for Person E. However, Person C, who was still residing in the property at the time did not support Person E's purchase. On XX/XX/20XX, lawyers for Person F sent Person E a letter which stated Person F wanted to renounce their entitlement in Person B's estate. On XX/XX/20XX, Person A received Letters of Administration for the deceased's estate. On XX/XX/20XX, Person F's lawyers sent a letter advising Person E that Person F intended to claim their entitlements from Person B's estate. This claim impacted the funds that Person E would have inherited from the estate and further delayed administration of Person B's estate and the property sale. An agreement between Person E and Person F was not reached and Person E realised that they would not have sufficient funds to purchase the property. Person A provided Person C notice of the impending sale of the property. Person C had lived at the property for several years and refused to vacate until they had found alternative accommodation. Person A respected Person C's position and waited for them to find alternative accommodation before clearing the property. When Person C eventually vacated the property, furniture and other personal items needed to be removed. Preparing the property for sale took several months as Person A was also working full time. Prior to the property being sold, Person A needed to remove the deceased's spouse's name from the title before it could be transferred to Person A as the administrator. Person A also needed to contact the bank to remove the mortgage and discharge it from the title. In approximately XX/20XX, the property was listed for sale. On XX/XX/20XX, Person A entered into a contract to sell the property. Settlement occurred on XX/XX/20XX.

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