ATO Interpretative Decision
ATO ID 2001/732 (Withdrawn)
Income Tax
CGT- Deceased Estate - Cost base of CGT asset - legal cost incurred by executor in relation to another family member's estate.FOI status: may be released
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This ATO ID has been withdrawn as it does not contain an interpretative decisionThis document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Do legal costs incurred by the executor of a deceased estate, while acting as the executor of another family member's estate, form part of the cost base of the deceased estate's assets pursuant of subsection 110-25(6) of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. The legal cost were not incurred in relation to the assets of the deceased estate in question and therefore do not form part of the cost base under subsection 110-25(6) of the ITAA 1997. However, they may form part of the cost base of the assets of the other family member's estate.
Facts
The taxpayer is the executor of a deceased estate.
The taxpayer in their capacity for the late taxpayer's family also performed other duties, including acting as executor for the estates of other deceased family members.
Reasons for Decision
Although the taxpayer may have incurred this expenditure in their wide ranging duties performed for the deceased's family, this capital expenditure was not incurred in their capacity as the executor of the deceased estate in question. They were not incurred in establishing, preserving or defending their title to the assets devolved to that estate. However the expenditure may fall for consideration as part of the cost base of the assets of the estates of the other deceased family members before they were devolved to the taxpayer in their capacity as executor of this estate.
Accordingly, the taxpayer in their capacity as the executor of this estate, can not include this capital expenditure in the cost base of the estate's assets under the operation of subsection 110-25(6) of the ITAA 1997.
Date of decision: 27 September 2001
Legislative References:
Income Tax Assessment Act 1997
Subsection 110-25(6)
ATO ID 2001/729
ATO ID 2001/730
ATO ID 2001/731
ATO ID 2001/733
ATO ID 2001/734
ATO ID 2003/1048
Keywords
Capital gains tax
Capital gains
CGT asset issues
CGT cost base
CGT deceased estates
Capital Gains Tax CoE
ISSN: 1445-2782
| Date: | Version: | |
| 27 September 2001 | Original statement | |
| You are here | 27 July 2007 | Archived |