Private ruling: Deceased estate
Date of advice: 29 August 2018
Published: October 2018
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the Commissioner exercise the discretion in section 118-195 of the Income Tax Assessment Act 1997 and extend the main residence exemption for the property, to mid 20XX? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow the extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au.

Relevant facts and circumstances: The deceased purchased the property after 20 September 1985. The deceased spent XX months in a nursing facility before passing away. Prior to the deceased entering the nursing facility, their child A had lived at this property on and off for a number of years. The deceased died in early 20XX and probate was granted in late 20XX. They were survived by a number of adult children, all of whom were beneficiaries of their Will. A number of their children were the executors of the estate. After the deceased’s death, A’s physical and mental health rapidly deteriorated. A suffered from mental health issues and had separated from their spouse. They would disappear for long periods of time before returning to the property. A was in and out of care facilities during this time. Whilst the deceased was in the nursing facility A began residing at the property which was meant to remain vacant. A’s siblings attempted to intervene; however A would not leave the property and began direct deposit transferring $XXX a week to the deceased’s account in early 20XX. This arrangement was not agreed upon with the deceased or any other family member and A was asked to stop. These payments continued until late 20XX. The property became neglected and damaged, often A would be found unresponsive. A’s siblings attempted to intervene and care for them during this time and found it difficult to do so. A remained co-executor of the estate and would not agree to leave the property for sale to occur. A was moved to a care facility in early 20XX, but absconded from the facility and returned to the property on many occasions. The solicitor for the estate visited A in the care facility to discuss the sale of the property. A would not agree to the sale and the solicitor informed them that they would need to engage another solicitor if they wished to retain the property as there was a conflict of interest. There was no contact from a solicitor representing A. A died in early 20XX. The property took XX months to clean, dispose of rubbish, and renovate to a standard to sell. Settlement occurred in mid 20XX.

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