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Edited version of your written advice
Authorisation Number: 1051270333111
Date of advice: 17 August 2017
Ruling
Subject: Capital gains tax – deceased estate – main residence exemption
Question
Is any capital gain on the sale of the property disregarded?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2017.
The scheme commences on:
15 September 1995.
Relevant facts and circumstances
The deceased and another individual acquired a property as joint tenants after 20 September 1985.
The dwelling was used as the main residence of both the deceased and the other individual.
The dwelling was never used to produce income.
Some years later, the other individual passed away.
The deceased continued to live at the property until they passed away a number of months later.
Shortly after, the property was sold and settled by the Executor of the Estate.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-110
Income Tax Assessment Act 1997 section 118-195
Reasons for decision
The capital gains provisions allow for concessional treatment to be given to a dwelling that was owned by a deceased person if the executors of the deceased person’s estate sell that dwelling within two years of the date of death.
Any capital gain or capital loss made on the sale of such a dwelling is disregarded if the dwelling was:
● Acquired by the deceased before 20 September 1985, or
● The deceased’s main residence when they died.
As the dwelling was sold by the executor within two years of the date of death, and the dwelling was the deceased’s main residence when he died, any capital gain on the sale of the property is disregarded.
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