Private ruling: Deceased estates - extension for 2-year discretion
Date of advice: 26 September 2025
Published: 17 November 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: DD MM 20YY

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 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: On DD MM YYYY, the Deceased and their spouse (Person A) purchased a dwelling (Property A). The property was held as tenants in common, with each party owning a 50% share. It served as the main residence of both the Deceased and Person A. On DD MM YYYY, the Deceased passed away. The property was situated on less than two hectares of land. The Deceased also held an ownership interest in a separate property (Property B). Property B was held for investment purposes and was not used as the Deceased's main residence. The Deceased's Will dated DD MM YYYY, appointed Person C and another individual as executors and directed that their interest in the property be held on trust for Person A, who was granted a life interest. The trust terms included rights to reside, responsibilities for property upkeep, and provisions for sale, replacement housing, or care needs. Upon Person A's death or disqualification, the property or its proceeds were to be distributed equally among the Deceased's surviving children or grandchildren. On DD MM YYYY, Probate was granted to the Deceased's executors. Following the Deceased's passing, Person A continued to reside at the property until DD MM YYYY. During this period, Person A did not nominate any other dwelling as their main residence. From DD MM YYYY, Person A resided in various residential care facilities. On DD MM YYYY, Person A returned to live at the property with their child, Person D, who acted as their full-time carer. Person A's Estate On DD MM YYYY, Person A passed away. At the time of their death, Property A was their main residence and held a 50% ownership interest in the property. The trustee has provided supporting information indicating that the administration of the Deceased's estate was delayed due to the life interest held by Person A, as well as subsequent delays in the administration of Person A's own estate. These delays were attributed to the complexity of Person A's estate and a dispute concerning the validity of their Will. Additional contributing factors included a family provision claim and the prolonged occupancy of the property by a beneficiary. These issues collectively impacted the progress of the estate administration during the period from DD MM 20XX to DD MM 20XX. Between DD MM YYYY and DD MM YYYY, minor repairs were carried out at the property. On DD MM YYYY, a formal sale campaign was launched. Sale of the property On DD MM YYYY, contract of sale signed for Property A. On DD MM YYYY, settlement of property A completed.

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