Private ruling: CGT - deceased estate
Date of advice: 7 November 2025
Published: 22 December 2025
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: XX November 20XX

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 located on Property A 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. Issue 2 | Q2: Will the Commissioner exercise the discretion under subsection 152-80(3) of the ITAA 1997 to extend the 2-year time limit to allow the relevant small business CGT concessions to be applied in relation to the CGT event that happens in relation to Property A? | A2: Yes. Having considered your circumstances and the relevant factors, including the inability to enter into a contract for the disposal of the Property A within 2 years of the death of the deceased, and the period for which an extension of time is requested, the Commissioner will exercise his discretion in accordance with subsection 152-80(3) of the ITAA 1997 and allow the extension of time. | Q3: Will the Commissioner exercise the discretion under subsection 152-80(3) of the ITAA 1997 to extend the 2-year time limit to allow the relevant small business CGT concessions to be applied in relation to the CGT event that happens in relation to Property B? | A3: Yes. Having considered your circumstances and the relevant factors, including the inability to enter into a contract for the disposal of the Property B within 2 years of the death of the deceased, and the period for which an extension of time is requested, the Commissioner will exercise their discretion in accordance with subsection 152-80(3) of the ITAA 1997 and allow the extension of time.

Relevant facts and circumstances: The deceased was the registered as the sole owner of Property A and B. The deceased died and both properties formed part of the estate assets of the deceased. Throughout the entire period of ownership, the deceased utilised both properties exclusively for the purposes of their primary production business excluding around 2 hectares of Property A as their main residence and not to produce income. The deceased died intestate. The deceased had a previous de-facto with children. The deceased had been living with their de-facto spouse and their children at the time of their death. Following the deceased's death, family law property orders were made for Property A. The orders provided that the proceeds of sale of Property A be split between the previous de-facto spouse and the deceased as part of their property settlement. After the deceased passed the de-facto spouse and their children resided in Property A. A dispute arose as to who should be the trustee for the deceased's estate. Letters of administration were made to the Supreme Court upon intestacy. Both properties devolved to the trustee of the deceased's estate. The various disputes between the deceased's former spouse, their children and the new de facto spouse significantly delayed the administration of the estate. It was required to obtain sworn valuations for Property A and Property B and obtaining written consent of the family beneficiaries regarding a reasonable sale price. The dwelling on Property A contravened the relevant building act and was deemed unfit for occupation. You were required to work with the building surveyor to determine works required to make the dwelling compliant. Difficulty arose during this process due to the deceased's de-facto spouse's unlawful occupation of the dwelling. Court proceedings commenced to seek recovery of Property A from the deceased's de-facto spouse. A warrant was executed for the possession of Property A. When you took possession of Property A, you had to resolve the building order to make the dwelling fit for occupation. This led to additional conflict between the parties as to who should pay for the rectification work. The building order also made it difficult to determine the value of the property. You were approached by a person who was prepared to buy the property in its current condition. Property A and Property B have been sold.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 section 152-80 | Income Tax Assessment Act 1997 subsection 152-80(1) | Income Tax Assessment Act 1997 paragraph 152-80(1)(d) | Income Tax Assessment Act 1997 subsection 152-80(3)