ATO Interpretative Decision

ATO ID 2001/734 (Withdrawn)

Income Tax

CGT- Deceased Estate Cost base of CGT asset - costs incurred before taxpayer's death
FOI status: may be released

This ATO ID has been withdrawn as it does not contain an interpretative decision

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 a solicitor, who subsequently becomes a taxpayer's executor, before the death of a taxpayer form part of the costs base of assets of the deceased taxpayer's estate pursuant to subsection 110-25(6) of the Income Tax Assessment Act 1997 (the ITAA 1997)?

Decision

No. Expenses incurred before a taxpayer's death by a solicitor who later becomes the executor of the deceased estate do not form part of the cost base of the estate's assets under subsection 110-25(6) of the ITAA 1997.

Facts

The taxpayer is the executor of a deceased estate. They also acted as a solicitor for a client before their death and for other members of the deceased's family.

Before the client died, the taxpayer's duties as solicitor included seeking a declaration that interests in an asset pass to the client and also that another family member record payments in respect of an asset sold.

Reasons for Decision

Both these matters were finalised before the client died and the taxpayer's duties as the executor of the estate in question commenced. Hence any direct costs incurred may fall for consideration in the costs base of the deceased assets before their death, that is, before they devolved to the taxpayer in their capacity as executor of her estate.

Accordingly, this expenditure can not be claimed under subsection 110-25(6) of the ITAA 1997 by the taxpayer in their later capacity as the executor of the deceased's estate.

Date of decision: 27 September 2001

Legislative References:
Income Tax Assessment Act 1997
Subsection 110-25(6)

Related ATO Interpretative Decisions
ATO ID 2001/729
ATO ID 2001/730
ATO ID 2001/731
ATO ID 2001/732
ATO ID 2001/733
ATO ID 2003/1048

Keywords
Capital gains tax
Capital gains
CGT assets
CGT cost base
CGT deceased estates
Capital Gains Tax CoE

Business Line: Centres of Expertise Capital Gain Tax

Date of publication: 30 November 2001

ISSN: 1445-2782

history

	Date:	Version:
	27 September 2001	Original statement
You are here	27 July 2007	Archived

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