Private ruling: Commissioner's discretion - deceased estate
Date of advice: 16 May 2024
Published: 24 June 2024
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of the 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 DD MM 20YY. The property is located at XXXX (the property). The deceased acquired the property before 20 September 1985. The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time. The property was situated on less than two hectares of land. At the time the deceased passed away, their sibling also resided at the property. Due to a diagnosed medical condition, they required assisted living arrangements to be made and locating an appropriate facility took considerable time. The property was listed for sale on DD MM 20YY, several months before the expiry of the two-year period. Approximately a week after the property was listed for sale, the suburb the property is located in was affected by a natural disaster. The property suffered damage beyond repair. On DD MM 20YY an insurance claim was lodged with the insurance provider of the deceased for a policy they held before they passed away. On DD MM 20YY the executor was notified the property was eligible for a buy back through an organisation established by the State government to deal with the impact of the natural disaster (the organisation). On DD MM 20YY the cash settlement acceptance was emailed to the insurance company. On DD MM 20YY the building insurance proceeds were deposited into the trust account held by the solicitor. On DD MM 20YY the solicitor issued a letter to the organisation disputing the buy back offer. On DD MM 20YY the organisation issued a letter advising a revised offer to purchase the property. On DD MM 20YY the property sale to the organisation was settled. After the natural disaster, the property was left vacant until it was sold.

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