Private ruling: Deceased estate
Date of advice: 29 January 2026
Published: 23 March 2026
Ruling period: Period ended DD MM YY
Date scheme commenced: DD MM YY

Ruling: Q1: Will the Commissioner exercise discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) and extend the 2-year period for the executor to dispose of the property and disregard any capital gain or capital loss? | A1: Yes. Due to the complexity of the estate and the multiple issues the executor faced in administering the estate and fulfilling their guardianship responsibilities, the Commissioner will exercise discretion to extend the 2-year period for the estate to dispose of the property and disregard any capital gain or loss made.

Relevant facts and circumstances: In YY the deceased acquired the property at Address A jointly with their spouse. The property is on less than 2 hectares. On DD MM YY the deceased acquired their spouse's 50% share of the property when they passed away. On DD MM YY the deceased passed away. The property was the deceased's main residence at the time of their passing and was not being used to produce assessable income. Person A (the executor) was one of 3 executors nominated in the Will of the deceased. The other two renounced the role. Person A was unaware of this nomination until the passing of the deceased. The deceased's Will left everything on trust for their child Person B, to pay for their upkeep and care. Person B is the deceased's adult child, aged X at the time of their parent's passing. Person B has an acquired brain injury from an accident. Person B is wheelchair bound and has significant emotional and behavioural issues as a result of their injury. At the time of their parent's passing they lived in community housing with support but the deceased managed all of their affairs. The executor was aware that if they also renounced the role of executor, that Person B's care would revert to XXX. They were concerned that this would not be in Person B's best interest and felt that they were better placed to support Person B. The executor has children of their own, one of whom has a disability, and worked full time. From MM to MM YY the executor's focus was on the immediate needs of Person B such as ensuring adequate daily support, medications plans, and payments. The Covid pandemic complicated many of these tasks, often requiring the executor to take leave in order to deal with the various issues, including: • Collecting Person B's medications from the pharmacy the deceased used which meant driving a significant distance and providing proof that they were the executor for the deceased • Identifying close contacts of the deceased to notify them of their passing • Organising the funeral and cremation and attending the bank to organise the funds to pay for this • Supporting Person B to be as involved in the process as they wanted or needed to be • Organising Person B's support agency to pay for their groceries and order their essential supplies • Meeting with Centrelink in relation to Person B's pension • Arranging for the preparation of financial statements to provide to XXX in relation to Person B's finances • Attending the property on X initial trips of several hours each, to locate important documents and items of value • Cleaning out the property which turned out to be an enormous job as the deceased and their spouse had been hoarders • Dealing with the local council and contractors as the property had been let go and the overgrown gardens were deemed to be a 'nuisance' by neighbours. The executor had provided Person B with their mobile number. They were receiving up to X-X calls a day from Person B, many of them angry if they did not answer straight away. The executor was forced to communicate with their support agency and have their number removed from Person B's record and tried to support their team to be responsive to their needs so they would not be calling the executor all day. This caused significant distress to the executor and brought interruption to their employment and family commitments. Arrangements were made for them to call Person B every day at a set time until things settled. They continued to be the contact person for Person B's support agencies as Person B struggled to deal with the changes to their life that their parent's passing had created. The executor was encouraged by Person B's team and support coordinator to become their guardian due to a concern in the delays experienced with XXX in dealing with their NDIS plan review. There were concerns that XXX was not properly equipped to take on the guardianship role. The executor met with lawyers and lodged an application and in MM YY they attended a Civil and Administrative Tribunal hearing and was appointed the legal guardian of and financial administrator for Person B. From MM to MM YY the executor was busy managing and organising their guardianship duties. In MM YY to MM YY, the executor dealt with a second property the deceased had owned at another location. This was a very dilapidated property and the executor had been approached on a random basis to see if they would, in their role as executor, sell the property. Time was spent organising the sale and a valuation for tax purposes. On DD MM YY the contract of sale was signed on the other property with settlement occurring on DD MM YY. The X months from MM YY to MM YY was spent cleaning and managing the property at Address A. As noted above, the deceased had been a hoarder and the property had become overgrown. From MM YY up to MM YY the executor was exploring the option of turning the property into a purpose built home for Person B. This was going to involve demolishing the existing dwelling on the property and building a specifically designed dwelling suitable to their needs. A professional building firm was engaged to prepare a report into this option. In MM YY a firm of architects provided the executor with a concept design report for a potential rebuild of the property. This was a proposal to demolish the existing dwelling and build a purpose built dwelling for Person B. The report put forward 3 different design options. In MM YY Person B was asked to move out of the community housing they resided in, with all of their services ceasing. This created an urgent need to find housing and support for them. The plan to re-develop the property was abandoned and selling the property again became a priority. From MM YY to MM YY the executor was organising and engaging a new support team for Person B, as well as respite care (urgent). It was a difficult time for both Person B and the executor. Overall the executor spent at least XX hours over these few years just tending to Person B's needs. This time does not include time spent administering the estate. They often were required to sacrifice personal time and family commitments to see to their guardianship duties. Also, during this period time was spent cleaning and preparing the property for sale. No renovations were undertaken and the property went to market as is. On DD MM YY the property sold. On DD MM YY settlement took place.

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