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Edited version of private advice
Authorisation Number: 1051804788144
Date of advice: 12 February 2021
Ruling
Subject: Deceased estate and life interest
Question
Can the trustee apply a partial exemption under subsection 118-210(4) of the Income Tax Assessment Act 1997 in relation to the sale of the property?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner agrees that you meet the conditions for a partial exemption because you acquired the property under the Testator's will for occupation by the beneficiary and they occupied it as their main residence for part, but not all of your ownership period. Further information about calculating a partial exemption can be found by searching ' QC 52195' on ato.gov.au.
This ruling applies for the following period
Year ended 30 June 20XX.
The scheme commences on
1 July 20XX.
Relevant facts
The Testator passed away in 19xx leaving a will dated xx x 19xx.
Probate was granted to person A and person B and administered the estate and subsequently were Trustees of the testamentary life interest trust.
The will stipulated that the beneficiary's entitlement to both income and capital for the maintenance and benefit of the beneficiary at the discretion of the trustee.
The beneficiary is the deceased's child.
Person A retired as Trustee.
Around 20xx, person B retired as trustee and appointed an organisation as Trustee of the trust (C).
On XX XX 20XX C entered into a contract to purchase a residential property (the property) to be held on trust for the Life Interest Beneficiary to reside in. C was registered on the title a short time later.
The Beneficiary resided in the property from date of acquisition until date of death.
The beneficiary passed away in 20xx.
The C as trustee organised the property to be cleaned and ready for sale.
The property was listed for sale and was sold in 20xx and settled a short time later.
The property has not been used to produce assessable income.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 subsection 118-130(3)
Income Tax Assessment Act 1997 subsection 118-210(4)
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