Private ruling: Deceased estate – two year discretion
Date of advice: 16 June 2017
Published: October 2017
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 (ITAA 1997) and allow an extension of time to the two year period to dispose of the property? | A1: Yes. Having considered your circumstances and the relevant factors, the Commissioner is able to apply his discretion under subsection 118-195(1) of the ITAA 1997 and allow an extension of time.

Relevant facts and circumstances: The deceased left a valid Will and probate was issued. One of the assets of the deceased estate was the deceased’s main residence (the property). The purchase of the vacant block of land and the construction of the main residence was completed prior to 20 September 1985. The title was held in the deceased’s spouses name solely and was transferred into both their names as 'joint tenants’ post 20 September 1985. The deceased’s spouse passed away and the deceased inherited their ownership interest in the property. The property has never been used to produce assessable income at any time during the ownership period or since death. An unforeseen personal situation occurred that prevented you from attending to the administration of the estate within the two year period. As soon as it was practical, you engaged a real estate agent and the property was actively marketed for sale. The property was contracted for sale a short time later and settlement has taken place.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 118-195(1)