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Edited version of private advice
Authorisation Number: 1051728438632
Date of advice: 28 July 2020
Ruling
Subject: Capital gains tax - deceased estate - main residence - absence choice
Question
Is the cost base in the hands of the executors of the interest in the dwelling acquired by the deceased after 20 September 1985 calculated as the market value of the property as at the time of the deceased's spouse date of death?
Answer
Yes.
This ruling applies for the following periods:
Year ending 30 June 2020
The scheme commenced on:
1 July 2019
Relevant facts
Person A and person B acquired a dwelling. (The dwelling)
The dwelling was acquired as joint tenants and was acquired prior to 20 September 1985.
Person B passed away in 20XX.
Person A acquired their half interest in the dwelling under the rule of survivorship.
At the time of person's B passing the dwelling had a market value of $X.
Person A continued to reside in the dwelling until they moved into care in 20XX.
The dwelling was first rented in 20XX at which time the market value of the dwelling was $X
The dwelling continued to be rented until person A death in 20XX.
The dwelling was sold by the executor of person A estate for $X.
Settlement of the contract of sale took place a short time later.
The executor has made a choice to treat the dwelling as person A's main residence until 20XX.
The market value of the dwelling on x xx 20XX was an amount of $X.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 Section 108-5
Income Tax Assessment Act 1997 Section 110-25
Income Tax Assessment Act 1997 Subsection 112-25(2)
Income Tax Assessment Act 1997 Subsection 112-25(3)
Income Tax Assessment Act 1997 Section 115-25
Income Tax Assessment Act 1997 Section 116-20
Income Tax Assessment Act 1997 Section 118-145
Income Tax Assessment Act 1997 Subdivision 128
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