Private ruling: Deceased estate
Date of advice: 30 March 2026
Published: 9 June 2026
Ruling period: Year ended DD MM 20YY
Date scheme commenced: DD MM 20YY

Ruling: Q1: Will the Commissioner exercise discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time for you to dispose of the estates share of ownership interest in the dwelling acquired from a deceased estate and disregards the capital gain the estate made on the disposal? | A1: Yes, the legal challenges faced during the acquisition of probate took more than 12 months. This caused significant delays outside your control, delaying the ultimate finalising of the estate. Therefore, having considered your circumstance and the relevant factors the Commissioner will 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.

Relevant facts and circumstances: The deceased passed away on DD MM 20YY. The property was the deceased's main residence prior to their death. The property is less than 2 hectares. The deceased executed their will on DD MM 20YY. The executors, X and Y reside overseas. The beneficiaries are X, who resides in country A and Z, who resides in Australia. The property was never used to produce assessable income. The beneficiary Z lived at the property after the deceased's death. The High Court of country A granted probate on DD MM 20YY. This was necessary to deal with the assets in country A. You applied for an exemplification of the grant of probate in country A in the State Supreme Court to deal with the assets of the deceased in Australia. DD MM 20YY You were granted probate in the estate of the deceased from the High Court of country A. DD MM 20YY the grant application for reseal in the estate of the deceased was lodged with the State Supreme Court. The probate registry had difficulties in accepting the application for an exemplification of the grant of probate in country A. The grant and will in their form were deemed incompatible with the State Supreme Court. The Supreme Court required that a separate application be made to prove the will in the State Supreme Court. As a result, the grant of application for probate was lodged on DD MM 20YY. The probate was granted by the Supreme Court DD MM 20YY. You came to an understanding with beneficiary Z to let them purchase the property by combining their sum of inheritance and borrowed finance. On DD MM 20YY the estate signed the contract to the sell the property to the beneficiary. The beneficiary then engaged a finance broker to assist them with applying for finance. On DD MM 20YY the finance was approved by a bank for the beneficiary. On DD MM 20YY settlement was completed on the sale of the property.

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