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Edited version of private advice
Authorisation Number: 1052087574605
Date of advice: 21 February 2023
Ruling
Subject: CGT - deed of surrender of remainder interest
Question
Will there be any CGT implications for the remaindermen listed in the Deed of Surrender of Remainder Interest upon the disposal of their interest in the Estate of the Deceased?
Answer
No.
This ruling applies for the following period:
Income Year ended XX/XX/20XX
The scheme commenced on:
XX/XX/20XX
Relevant facts and circumstances
On XX/XX/19XX, the Deceased and XXX (Spouse) purchased a property located at XXX (the Property).
Upon the Spouse passing on XX/XX/20XX, title to the property transferred to the Deceased by right of survivorship.
On XX/XX/20XX, the Deceased passed away leaving a Will (the Will).
The Will appointed XXX (the Life Tenant), XXX and XXX as the Trustees of the Estate (the Trustees).
The Will directed the Trustees to hold the Property on Trust for such of the Life Tenant's children (the Remaindermen) as shall acquire the age of 18 years and granted a life interest over the Property to the Life Tenant.
On XX/XX/20XX, title to the Property was transferred to the Trustees.
The Remaindermen have attained eighteen years of age.
On XX/XX/20XX, the Remaindermen, the Trustees and the Life Tenant executed the Deed whereby the Remaindermen agreed to forego their benefit under the Will so that the Life Tenant received the Property absolutely. The Remaindermen did not receive any compensation for surrender of their interest under the Will.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 128-10
Income Tax Assessment Act 1997 subsection 128-15(3)
Income Tax Assessment Act 1997 paragraph 128-20(1)(d)
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