ATO Interpretative Decision

ATO ID 2002/327 (Withdrawn)

Income Tax

Gifts/Contributions - commencement of 12 months period of ownership on gift of property by executor of deceased estate.
FOI status: may be released

This decision has been withdrawn as it does not correctly reflect the ATO view

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Does the 12 months period in items 1(b), 2(b) and 3(b) of subsection 30-15(2) of the Income Tax Assessment Act 1997 (ITAA 1997) for an executor of a deceased estate, commence at the date the property was purchased by the deceased?

Decision

Yes. The commencement date of the 12 months period in items 1(b), 2(b) and 3(b) of subsection 30-15(2) of the ITAA 1997 for an executor of a deceased estate is the date the property was purchased by the deceased.

Facts

The taxpayer is the executor of a deceased estate. As the executor, the taxpayer has made gift of property to a higher education institution. The property was purchased by the deceased during the 12 months before the executor proposes to gift the property.

The property is not trading stock of the deceased.

The higher education institution qualifies as a fund, authority or institution to which deductible gifts or contributions can be made.

Reasons for Decision

Division 30 of the ITAA 1997 provides an income tax deduction for gifts or contributions made to a fund, authority or institution.

Section 30-15 of the ITAA 1997 sets amongst other criteria the type of gift or contribution a taxpayer can make. The types of gift or contribution that are allowable deductions are:

•: money; or
•: property (including trading stock) that the taxpayer purchased during the 12 months before making the gift; or
•: an item of trading stock; or
•: property valued by the Commissioner of Taxation at more than $5,000.

Taxation Ruling IT 2622 states that on the death of a taxpayer the:

•: property of the deceased passes to the executor or administrator; and
•: executor or administrator steps into the shoes of the deceased and winds up the deceased's personal affairs.

In other words, the executor holds the deceased's property as absolute owner, subject to the fiduciary duty to the beneficiaries and perhaps also the creditors of the estate: Comm of Stamp Duties (Qld) v. Livingston [1965] AC 694 3 ALL ER 692.

Therefore, the taxpayer, as executor, is deemed to have purchased the property at the time the deceased purchased the property. Accordingly, the 12 months period of ownership commences from the date the deceased purchased the property that has been gifted.

Date of decision: 22 February 2002

Year of income: Year ending 30 June 2002 Year ending 30 June 2003

Legislative References:
Income Tax Assessment Act 1997
section 30-15(2)

Case References:
Comm of Stamp Duties (Qld) v Livingston
[1965] AC 694
3 ALL ER 692

Related Public Rulings (including Determinations)
IT 2622

Other References:
JD Heydon and PL Loughlan Cases and Material on Equity & Trust 5th Edition

Keywords
Deceased Estates
Executor of deceased estate
Gifts & donations
Gifts to organisations

Business Line: Small Business/Individual Taxpayers

Date of publication: 28 March 2002

ISSN: 1445-2782

history

	Date:	Version:
	22 February 2002	Original statement
You are here	22 August 2002	Archived

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