Private ruling: Deceased estate - 2-year discretion
Date of advice: 19 January 2026
Published: 16 March 2026
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time so that the capital gain made on disposal of the dwelling can be disregarded? | A1: Yes. Having considered the relevant facts, the Commissioner is able to apply his discretion under Section 118-195 of the ITAA 1997 and allow an extension of time to the two-year period. The circumstances and reasons as per PCG 2019/5 where we will allow a longer period where the dwelling could not be sold and settled within two years of the deceased's death due to reasons beyond your control that existed for a significant portion of the first two years, were satisfied to allow a discretion beyond the two years after the deceased's death.

Relevant facts and circumstances: The deceased passed away on XX /XX /20XX. The deceased owned a property (the property) which was purchased prior to 20 September 1985 (pre-CGT). The property was the deceased's main residence for the entire time until passing away. On XX/XX/20XX, the deceased made their final Will. The deceased had made three known prior Wills. The most recent dated provided Will appointed a solicitor as Executor and Trustee (the trustee). A beneficiary (the beneficiary) detailed in clause 3.2 and 4.3 of the deceased's Will, was granted a gift by the deceased and a percentage of the residual of the estate. On XX/XX/20XX, the trustee was contacted by the beneficiary to advise that they believed the deceased had made a later Will sometime after the most recent one. Following that discussion, further investigations were required to ascertain whether there was a later Will. This involved placing advertisements, contacting beneficiaries identified in the earlier Wills prepared by the deceased, searching the home of the deceased, examining the bank records of the deceased, obtaining phone records and making enquiries of familiar law firms. On XX/XX/20XX an email from the trustee requested another firm to check their records for any Wills for the deceased dated later than the most recent one. On XX/XX/20XX the trustee received an email from the lawyer who prepared one of the previous Wills of the deceased. They do not hold any other Wills of the deceased after the last previous one. On XX/XX/20XX an email confirming that the last previous Will is the only one they have on file. This was revoked when the most recent Will was completed. On XX/XX/20XX the beneficiary filed a caveat against the probate registry in order to prevent the Executor from obtaining probate. The trustee was not notified of the filing of the caveat. Not long after the filing of the caveat, an application for probate was submitted. The application was rejected by the registry stating that it would not be processed until the caveat was resolved. An email dated XX/XX/20XX from the trustee to the beneficiaries' states that, a lodged caveat against the estate prevents the executor from obtaining the Grant of Probate against the estate. On XX/XX/20XX an email from the Law Society states: The deceased's name Would any person or firm knowing the whereabouts of a Will or other document that post-dates XX 20XX, of the late deceased. The following actions were taken: • XX/XX/20XX - Affidavit filed by trustee detailing actions taken to locate a Will of the deceased made after 20XX. • XX/XX/20XX - Notice of probate action in the Supreme Court. • XX/XX/20XX - Claim filed by the trustee in the Supreme Court that a grant of probate of the 20XX Will be issued to the trustee. • XX/XX/20XX - Interlocutory application lodged in the Supreme Court by the trustee. • XX/XX/20XX - Notice of probate action in the Supreme Court. • XX/XX/20XX - Settlement agreement between the executor and beneficiaries states the following: Clause 2. Settlement Clause 2.1.1 An order be made in the Proceedings that the 20XX Will be admitted to probate as the last Will of the deceased and that a grant of probate of the 20XX Will be issued to the executor named in the 20XX Will; 2.1.2. The Cross Claim be dismissed. On XX/XX/20XX an Order from the Supreme Court. A grant of probate to be provided to the trustee as detailed in the Will dated XX/XX/20XX. On XX/XX/20XX a probate application was filed. Further information was requested by the court prior to the application being rejected and discontinuance of the application in XX 20XX. On XX/XX/20XX a Grant of Probate application was lodged. On XX/XX/20XX probate was granted to the executor. On XX/XX/20XX the property was sold at auction. The property remained vacant from the deceased's death until being sold. On XX/XX/20XX settlement occurred on the sale of the property.

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