Private ruling: CGT - deceased estate
Date of advice: 25 May 2026
Published: 3 August 2026
Ruling period: Period ending 30 June 202X
Date scheme commenced: DDMMYYYY

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: No.

Relevant facts and circumstances: The deceased passed away on DDMMYYYY. The deceased was an Australian resident for taxation purposes and their principal place of residence at the time of their passing was X (the Property). The Property was purchased on DDMMYYYY. The Executor and Trustee of their estate is their child, Person A, who was appointed under the will (the Will) of the deceased, and has been managing the administration of their affairs. The beneficiaries were their children, Person A and Person B. There were no challenges to the deceased's Will which was dated DDMMYYYY. Probate was granted on DDMMYYYY. The Property has been actively on the market since DDMMYYYY. An unsuccessful auction occurred after this time. Post auction negotiations were stalled, and no firm offers were received. A timeline of events was provided: • In DDMMYYYY - Person A's spouse, Person C, travelled overseas to Country B to care for their ill parent • Several months later, Person A's parent passed away in Australia • Approximately X later, Person A travelled overseas to assist Person C in caring for their parent • Approximately X, Person A and Person C returned to Australia • Person C returned to Country Z to care for their parent's worsening condition • During this time, Person A experienced a serious medical condition requiring emergency attention • Person A's spouse returned to Australia • Several days later, Person C's parent passed away • A few weeks later, Person A and Person C returned to Country B to attend Person C's parents funeral, assist with administration of his estate and provide family support to their widow and their sibling • The Property was sold for $X and the contract of sale was signed on DDMMYYYY • The settlement date of the Property was approximately X months after the sale date. As a result of the above events, Person A was emotionally and physically occupied with two close family bereavements, as well as their own medical issues and international travel to and from Country B. These circumstances significantly delayed their ability to attend to the sale of the deceased estate. A real estate agent was engaged to conduct marketing efforts, implement a public auction and seek a sale of the deceased's property. Administration of the estate has now concluded. The Property was never used for income-producing purposes and was less than X in size.


Reasons for decision: Summary: The Commissioner will not exercise his discretion under section 118-195 of the 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 disposal. | Detailed Reasoning - Detailed reasoning: S afe harbour is not applicable in this situation. Paragraph 11a of Practical Compliance Guideline 2019/5 Capital gains tax and deceased estates - the Commissioner's discretion to extend the 2-year period to dispose of dwellings acquired from a deceased estate (PCG 2019/5) states that during the first 2 years after the deceased's death, more than 12 months was spent addressing one or more of the circumstances described in paragraph 12 of this Guideline. | Detailed Reasoning - Circumstances that took more than 12 months to resolve: Paragraph 12: As per subparagraph 11(a) of this Guideline, one or more of the following circumstances must have taken more than X months to address: the ownership of the dwelling, or the will, is challenged - in this situation, there were no challenges to the deceased's Will. a life tenancy or other equitable interest given in the will delays the disposal of the dwelling The beneficiaries were their children Person A and Person B with X% and X% interest respectively. They can do what they want with the estate, but no life tenancy or other equitable interest was given specifically for the property. the complexity of the deceased estate delays the completion of administration of the estate There is no complexity in the estate itself. settlement of the contract of sale of the dwelling is delayed or falls through for reasons outside of your control This does not apply as they could assign an agent to have dealt with the sale. The Property has been actively on the market since MMYYYY. An unsuccessful auction was held on DDMMYYYY. restrictions on real estate activities imposed by a government authority in response to the COVID-19 pandemic There is no evidence of this occurring. Therefore, in your case the safe harbour compliance approach has not been established. | Detailed Reasoning - Paragraph 15 of PCG 2019/5: Factors that would weigh in favour of us allowing a longer period include those listed in paragraph 12 of this Guideline. The absence of some or all of those favourable factors does not necessarily preclude us from allowing a longer period. In your case there are no favourable factors from paragraph 12. | Detailed Reasoning - Paragraph 16: Factors that would weigh against us allowing a longer period include those listed in paragraph 13 of this Guideline. | Detailed Reasoning - Paragraph 13: In order to qualify for the safe harbour, none of the following circumstances can have been material to the delay in disposing of your interest per subparagraph 11(d) of this Guideline: waiting for the property market to pick up before selling the dwelling There is no evidence of this. waiting for refurbishment of the dwelling to improve the sale price There is no evidence of this. inconvenience on the part of the trustee or beneficiary to organise the sale of the dwelling We have evidence of this during the periods of time spent overseas as Person A and their spouse were caring for the spouses sick parent which may have made it inconvenient for them to sell the property; however it did not prevent them from taking other steps to selling it during the period of time. unexplained periods of inactivity by the executor in attending to the administration of the estate There is a period of time of unexplained inactivity from MMYYYY to MMYYYY. | Detailed Reasoning - Paragraph 17: Other factors that may be relevant to the exercise of our discretion (but are not relevant for the safe harbour) include but are not limited to: the sensitivity of your personal circumstances and of other surviving relatives of the deceased Person A had a sick parent-in-law, a death and a health condition. While they are sensitive circumstances that we consider, the weight in which we give them will vary against the overall circumstances. the degree of difficulty in locating all beneficiaries required to prove the will This is not relevant . any period the dwelling was used to produce assessable income This is not relevant. the length of time you held the ownership interest in the dwelling This is not relevant. | Detailed Reasoning - Paragraph 19: We will not allow a longer period for even a very short delay beyond X years if there are no relevant circumstances present. Based on the evidence we have received, a relevant factor for the consideration for the extension of time to dispose of the property includes the sensitivity of your personal circumstances. Person A assisted with the administration of their spouses parent's overseas estate from DDMMYYYY to DDMMYYYY. Such actions demonstrate that they were able to undertake the administration of affairs for an estate, prioritising one over the other. There have been no other relevant favourable reasons provided as to why this prevented Person A from administering the affairs of this deceased estate and disposing of the property within the statutory timeframe. Additionally, the Commissioner considers that you still needed to have taken active steps to dispose of the property via an agent or otherwise during this period. No reasons were provided as to why the property was then delayed in being placed on the market until MMYYYY. In weighing up the factors, the Commissioner considers that although there were sensitive circumstances overseas which impacted your ability to dispose of the property, Person A prioritised the administration of their spouses parent's estate over this deceased estate and although a very short delay beyond X years we will not allow a longer period of time.

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