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Edited version of private advice
Authorisation Number: 1051831265221
Date of advice: 11 May 2021
Ruling
Subject: CGT - deceased estate
Question 1
Will the Commissioner exercise his discretion for the executor to be assessed under section 99 of the Income Tax Assessment Act 1936 (ITAA 1936)?
Answer
Yes. After consideration of the relevant factors, the Commissioner is of the opinion that it would be unreasonable that section 99A of the ITAA 1936 should apply in relation to the trust. Accordingly, section 99 of the ITAA 1936 will apply.
Question 2
If the answer to Question 1 is "Yes", will the 50% capital gains tax discount apply to the capital gain from the sale of the property?
Answer
Yes. After consideration of the relevant factors, the 50% capital gains tax discount will apply. Further information on capital gains tax discount can be found by searching QC 22159 and QC 52245 ato.gov.au
This ruling applies for the following period:
Year ended 30 June 2020
The scheme commences on:
1 July 2019
Relevant facts and circumstances
GF (the deceased) passed away on XX March 20XX.
The deceased was a resident for Australian tax purposes.
Probate was granted on XX May 20XX to DL who was named as one of the executors of the will.
DL is a non-resident for Australian tax purposes.
The Trust is a non-resident Trust.
The beneficiaries of the Will are all residents for Australian tax purposes.
The deceased owned property being in State (the property)
The property was acquired by the deceased for $XXX,XXX on XX November 19XX (Post 1985)
The deceased never considered the property as his principle place or residence, rather it was rented out, and when it was not rented, it was either left vacant or used for when the deceased travelled to State for business.
The estate sold the property on XX March 20XX for $XXX,XXX.
As at XX June 20XX, there were no beneficiaries who are presently entitled to income of the estate.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 97
Income Tax Assessment Act 1936 section 98
Income Tax Assessment Act 1936 section 99
Income Tax Assessment Act 1936 section 99A
Income Tax Assessment Act 1997 section 115-25
Income Tax Assessment Act 1997 section 115-100
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