Private ruling: Commissioner's discretion - deceased estate
Date of advice: 12 March 2026
Published: 4 May 2026
Ruling period: Year ended 30 June 20YY
Date scheme commenced: DD MM 20YY

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of Income Tax Assessment Act 1997 (ITAA 1997) to 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? | 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: The deceased passed away on DD MM 20YY. The dwelling is located at XXX (the property). The deceased acquired the property before 20 September 1985. The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time. From December 20YY, the deceased resided in an aged care facility. Prior to this they resided in the property with their spouse (until their passing) and their child (the deceased's child). The deceased's child continued to reside in the property after the deceased's passing subject to the child maintaining the property and paying utilities. The property was situated on less than two hectares of land. The deceased left a Will dated DD MM 20YY. The Will provided details of the entity to be appointed as trustee, and the beneficiary of the estate. On DD MM 20YY, the deceased's child engaged lawyers to contest the Will, citing potential invalidity of the Will and confirming their intentions to lodge a Family Provision Claim. The Trustee was requested to wait until the claim was finalised before disposing of any assets. On DD MM 20YY, you received a letter from deceased's child's lawyers providing the death certificate and requesting written confirmation that any Estate assets will not be dealt with until such a time as the family provision claim of deceased's child has been finalised. From 20YY until 20YY the Trustee gathered information and sought records from multiple hospitals and medical practices to confirm the deceased's testamentary capacity at the time of making their Will. On DD MM 20YY, confirmation that no capacity issues existed was received. Probate was granted on DD MM 20YY. On DD MM 20YY, the deceased's child's lawyers were notified of Probate being granted. On DD MM 20YY, you received a letter from the deceased's child's lawyers regarding the beneficiary of the deceased estate. The letter stated: The purpose of this letter is to do the following: 1. To put the Executor and the beneficiary on notice that the deceased's child does intend on making a claim pursuant to the Family Provision Act. As such, the Executor is estopped from distributing any estate property. 2. To seek a copy of the assets and liabilities of the estate be provided to my office so that I can better advise my client. 3. To seek that the beneficiary notify any counsel that they appoint to correspond with my office regarding this matter. On DD MM 20YY, the property was transferred from the deceased and their late spouse to you. On DD MM 20YY, the Family Provision proceedings against the executor and the beneficiary commenced, claiming the deceased had not made adequate provision for their child in the Will. On DD MM 20YY, valuation of the property was requested from an independent property valuer. On DD MM 20YY, valuation of property was received. On DD MM 20YY, mediation between the relevant parties was conducted. On DD MM 20YY, a Deed of Indemnity and Release was executed. On DD MM 20YY, the deceased's child vacated the property. On DD MM 20YY, property appraisal instructions were sent to potential listing agents. On DD MM 20YY, an Electrical Safety Compliance was conducted and concluded. On DD MM 20YY, a property selling agent was appointed. On DD MM 20YY, the property was listed for sale. You entered into a contract to sell the property on DD MM 20YY with settlement occurring on DD MM 20YY.

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