Private ruling: CGT exemption
Date of advice: 3 July 2025
Published: 15 September 2025
Ruling period: Year ended 30 June 2025
Date scheme commenced: 1 July 2024

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time to dispose of the Property and disregard the capital gain 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 a few years ago. The property was purchased by the deceased a number of years ago. The property was the deceased's main residence for the whole of their ownership period. The property was less than 2 hectares in size. The property was never used to derive assessable income prior to or after the deceased passed away. The deceased passed away without a will. Letters of Administration were granted a couple of years ago. The delay in selling the property was as follows: Deceased passes away. Searching for the will commenced, data bases and search of the property were carried out. A funeral service amid the Covid pandemic was conducted. The family found out that the deceased was not divorced from their spouse and divorce papers had not been lodged. Legal proceedings commenced by the deceased's spouse. Lawyers were appointed to represent the deceased's children. These legal proceedings took months as the deceased's spouse and their lawyers did not know any of the details required to apply for probate. The spouse's lawyers would then speak to the estates lawyers to seek the information they required. In the year after the date of death the spouse ceases legal proceedings. After a lengthy delay in obtaining a death certificate from Births, Deaths and Marriages. One of the deceased's children finally receives a certificate however it is still inconclusive as the cause of death is still noted as 'incomplete'. This ultimately causes even more delays as the certificate does not give authority to act on behalf of the estate for most organisations. The child seeks legal advice with applying for Letters of Administration. Legal help was sought through a different lawyer. Multiple follow-ups were required with the Coroner's Office to obtain a confirmed cause of death. In response to enquiries, the delay was attributed to a significant backlog stemming from the COVID-19 pandemic. A revised death certificate was received from Births, Deaths and Marriages. This version was deemed as acceptable to use to obtain documents such as Letters of Administration. The process of applying for Letters of Administration proceeds. During this period, no action could be taken as the estate was awaiting the issuance of Letters of Administration. To progress this process, the estate was required to obtain various affidavits to satisfy the requirements of legal counsel. Legal representation was also necessary to liaise with third parties on behalf of the estate. Letters of Administration is granted. Before this time, the child had been unable to act or do anything to the estate. A clean up commences as the property is full of possessions. The Deceased was a hoarder. The property was in a state of disrepair. A substantial amount of items from the property were disposed of. Trades people were engaged to return the property to an inhabitable state for sale. The property is sold.

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