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Edited version of private advice
Authorisation Number: 1051719742876
Date of advice: 17 July 2020
Ruling
Subject: CGT - deceased estates
Question 1
Can you disregard any capital gains or losses made on the sale of Property A?
Answer 1
Yes
You can disregard any capital gain or loss made on the sale of Property A as the Deceased's ownership interest in Property A began before 20 September 1985 and you sold it within two years of the deceased's death.
Question 2
Can you disregard any capital gains or losses made on the sale of Property B?
Answer 2
Yes
You can disregard any capital gains or losses on the sale of Property B as it was the Deceased's main residence at the time of death, was not then being used to produce income and you sold it within two years of the deceased's death.
The whole of Property B is considered to be one dwelling even though the land was a separate asset to the residence while it was owned by the deceased (see Taxation Determination TD 96/21).
This ruling applies for the following period:
Year ending 30 June 2020
The scheme commences on:
1 July 2019
Relevant facts and circumstances
In 19XX, The Deceased was registered as the owner of a property (Property A). Property A consisted of a residence (Residence A) and land. The Deceased resided in Residence A located on Property A until 19XX.
In or about 19XX, the Deceased excised part of Property A by way of subdivision. The excised part of the property was given an address of XXXX. In or about 19XX, The Deceased constructed a residence (Residence B) on the excised property site (Property B).
In or about 19XX, The Deceased moved into Residence B on Property B which became their main residence.
Sometime later The Deceased rented out Property A.
In 20XX, The Deceased died.
Property A and Property B were sold separately within 2 years of the Deceased's death.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10(5)(a)
Income Tax Assessment Act 1997 subsection 108-55(2)
Income Tax Assessment Act 1997 section 118-110(1)
Income Tax Assessment Act 1997 section 118-195(1)
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