Private ruling: Commissioner's discretion - deceased estate
Date of advice: 17 November 2025
Published: 5 January 2026
Ruling period: Year ending 30 June 20YY
Date scheme commenced: DD MM YYYY

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: On DD MM YYYY, the deceased and their spouse jointly purchased a property located at XXX XXX (the Property). On DD MM YYYY, the spouse passed away leaving the property to the deceased. The property is less than 2 hectares in size. The property was the deceased's main residence just before their passing. The property was never used for the purpose of producing income during the deceased's ownership. The deceased and the administrator are both Australia residents for Australia tax purposes. The deceased left a will dated DD MM YYYY appointing their child A as their sole executor. The residue of the estate was to be divided between the children. On DD MM YYYY, the deceased made a codicil to appoint person 1, person 2 and person 3 to be additional executors for their estate and provided additional legacies to their 2 grandchildren. On DD MM YYYY, the deceased made a second codicil to revoke the appointment of person 1 as their executor. On DD MM YYYY, the deceased passed away. On DD MM YYYY, the deceased's child B challenged the deceased's will and lodged a caveat to stop the issue of a grant of probate in the estate. On DD MM YYYY, the deceased's child A and person 2 applied to the court for an order for a grant of probate. On DD MM YYYY, the parties attended mediation to resolve the disputes for both late parent's and the deceased's estates. In MM YYYY, a Deed of Settlement was made between the deceased's Child B and Child A, person 1 and the grandchildren. the deed set out the terms of settlement namely. a. the deceased's child B would cease opposing a grant of probate in the estate to the deceased's child A. b. in lieu of the child B's percentage of the estate, the deceased's Child B would receive $XXX and the deceased's Child A the residuary from the estate. c. The $XXX was to be paid within 14 days of settlement of the sale of the property. d. legal fees of $XXX plus GCT would be paid out of the estate. On DD MM YYYY, probate was granted to the deceased's Child A as the sole executor, with leave reserved for person 2 and person 3. Between DD MM YYYY and DD MM YYYY, further legal disputes between the family members and numerous court events occurred to obtain letters of administration. On DD MM YYYY, a third independent party was appointed as the Administrator and letters of administration was granted. Between DD MM YYYY and DD MM YYYY, the Administrator wrote to the family members, advising he had interviewed real estate agents, needed to clear the property and asked whether the deceased Child A wanted the items in the property as per the deceased's will. On DD MM YYYY, the deceased's Child B responded but the deceased's Child A did not respond. On DD MM YYYY, the Administrator sent a follow-up email to the deceased's Child A but again no response. On DD MM YYYY, the deceased's Child A appealed against the Judge decision and sought a stay pending the hearing. Justice XXX decided that the appeal had no prospect of success and refused to grant a stay. On DD MM YYYY, further legal action was taken by the deceased's Child A. On DD MM YYYY, the property was placed on the market with auction listed date. On DD MM YYYY, the Administrator issued urgent application in the Supreme Court to reconcile the legal action and to remove the caveat. On DD MM YYYY, the Judge ordered the Registrar-General to remove the caveat. On DD MM YYYY, the property sold at auction. On DD MM YYYY, settlement of the property occurred.

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