Private ruling: Commissioner's discretion - deceased estate
Date of advice: 6 January 2026
Published: 2 March 2026
Ruling period: Year ended 30 June 20YY | Year ended 30 June 20YY
Date scheme commenced: DD MM 20YY

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of 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.

Relevant facts and circumstances: Person A (the deceased) passed away on DD MM 20YY. The dwelling is located at 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. The property was situated on less than two hectares of land. Probate was granted on DD MM 20YY. You entered into a contract to sell the property approximately a year after the deceased's death. The contract of sale was conditional upon the issue of a new Title to deal with a boundary adjustment within 120 days from the contract date. It was discovered that the shed/garage constructed at the rear of the property had been built on the neighbouring property, and that the neighbour was also occupying a portion of the estate's property. To resolve this, a boundary adjustment was carried out through mutual land transfers. No monetary consideration was involved. Both the estate and the neighbouring property agreed to share the associated costs equally, except for the water tank installed on the property for fire-fighting purposes, which was borne solely by the estate. Settlement was due 30 days after the issue of Title or confirmation of the purchaser's finance whichever was the later. Delays were caused in achieving the planning permit approval due to the COVID-19 pandemic period with obtaining the planning permit for the boundary adjustment, which was assessed as a subdivision/boundary adjustment in a rural zone, preparing the survey plan for the property and neighbouring property, obtaining consent from the mortgagee of the neighbouring property and other issues. Due to the delay in settlement, you granted the purchaser's early possession of the property for a weekly rental of $X00.00 from the DD MM 20YY to DD MM 20YY. On DD MM 20YY, you received a letter from the Council advising your development application for a proposed reconfiguration of lots has been approved. On DD MM 20YY, the Council sealed the survey plan for the boundary adjustment and accompanying plan for the neighbouring property. On DD MM 20YY, the sealed Plan of Survey and Schedule of Easements were lodged at the Land Titles Office. On DD MM 20YY, the Land Titles Office advised that the Survey Plan had been accepted and available for transfers to be lodged. On DD MM 20YY, the Council sealed and dated an Adhesion Order. On DD MM 20YY, you collected a signed partial discharge of mortgage from the neighbour's solicitors. On DD MM 20YY, the State Revenue Office issued assessment notices for the stamp duty liability on the transfers. The boundary adjustment entitled mutual transfers between the executors and the owner of the neighbouring property which required assessment as to duty. On DD MM 20YY, the Land Titles Office issued the replacement Certificates of Title for the property and the neighbouring property. Settlement occurred approximately a year after the expiration of the 2-year period.

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