Private ruling: CGT - deceased estates
Date of advice: 24 August 2022
Published: November 2022
Ruling period: Year ended 30 June 20XX.
Date scheme commenced: 1 July 20XX.

Ruling: Q1: Will the Commissioner exercise his discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time to dispose of the property and disregard the capital gain or capital loss 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: Before the introduction of Capital Gains Tax (CGT) you and your spouse purchased a property. The size of the property is less than 2 hectares. The property was the main residence of both you and your spouse. You and your spouse had two children, Child 1 and Child 2. Before the introduction of CGT your spouse passed away. The property continued to be your main residence. A long time after CGT was introduced you moved into a nursing home. After you moved into a nursing home the property remained vacant for a period of time. The property was rented to tenants. The tenant requested and was granted a rent reduction due to financial hardship. Approximately seven years after you moved into a nursing home you passed away (the deceased). Child 1 is the administrator of the deceased's estate (the administrator). The administrator experienced multiple deaths in the family around the time the deceased passed away. Letters of Administration for the deceased's estate was granted to the administrator. The administrator contacted real estate agents to consider options for sale of the property. The National Cabinet announced a six-month moratorium on evictions over the next six months for residential tenants in financial distress who are unable to meet their commitments due to the impact of coronavirus. The tenant was impacted by coronavirus. Child 2 spoke with council regarding subdividing the property. The Administrator realised the subdivision was not a viable option and decided to sell the property. The administrator signed a contract for the sale of the property subject to a periodic tenancy at the reduced rate. Approximately 2 years and 6 months after the deceased passed away, settlement occurred on the property. The administrator of the deceased's estate has applied the absence rule for the deceased.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 118-130 | Income Tax Assessment Act 1997 section 118-145 | Income Tax Assessment Act 1997 section 118-195