Private ruling: Commissioner's discretion - deceased estate
Date of advice: 8 August 2023
Published: 25 September 2023
Ruling period: Year ending 30 June 2023
Date scheme commenced: 25 December 2020

Ruling: Q1: Will the Commissioner exercise their discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time for you to dispose of your ownership interest in the Property and disregard the capital gain or capital loss you 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: On X 19XX the Deceased along with their spouse purchased a property in Australia as joint tenants. On X 19XX the Deceased became the sole owner of the property after their spouse passed away. From 20XX until 20XX, Deceased spent considerable time in both Australia and overseas and was a dual citizen of both countries. The deceased also owned a property overseas, as well as the property in Australia. On X 20XX the Deceased passed away in Australia. At the time of their death, the Deceased was an Australian resident for tax purposes. X and Y are the executors of the estate of the Deceased. The property was situated on less than two hectares of land. The property had been the Deceased's main residence just before their death and was not used for the purpose of producing assessable income. On X 20XX, Y travelled overseas to commence administering the estate. Prior to administering the estate overseas, Y had to: • Establish that Deceased was an Australian resident to ensure overseas inheritance tax was not levied on their Australian assets; and • Obtain a grant of probate in Australia that could be resealed overseas. On X 20XX, after some time overseas to establish that Deceased was an Australian resident, the Applicant applied for a grant of probate in the relevant Supreme Court of the state or territory in Australia in which the property was located. On X 20XX the applicant received a grant of probate for the estate The delay was caused as the registrar incorrectly listed the deceased's date of death. On X 20XX, the property was transferred to the applicants in their capacity as the executors of the estate of the Deceased. On X 20XX the applicants engaged a real estate company to sell the property. On 20XX the property was listed for sale for $X. On 20XX, after lowering the price several times the property sold for $X. On X 20XX the property settled as the buyers extended their settlement period so they could sell their existing property.

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