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Edited version of private advice
Authorisation Number: 1052117471373
Date of advice: 16 June 2023
Ruling
Subject: Capital gains tax
Question
Are the executors for the estate liable for capital gains tax on the disposal of the properties?
Answer
No. Having considered the circumstance and relevant facts, the properties remain as pre-CGT assets as there have been no major capital improvements made to the properties since the introduction of CGT that results in them being treated as separate assets to the properties.
For further information on property improvements and additions visit ato.gov.au and search for 'QC 66043'.
This ruling applies for the following period:
Year ending XX XX 20XX.
The scheme commenced on:
XX XX 20XX
Relevant facts and circumstances
The deceased passed away on XX XX 20XX.
Probate of the will was granted on XX XX 20XX appointing two executors.
The deceased purchased the properties with the land pre-CGT.
The properties were made up of two retail shops which were leased to commercial retail clients.
The properties were not inherited prior to being sold.
The properties continued to be rented to the existing tenants prior to the deceased's death until they were sold.
The properties required one major repair to the rooftops by the trustees in order to proceed with the sale.
On XX XX 20XX, the properties settled.
No major capital improvements had been made to the properties which costed more than 5% of the amount received when the assets were disposed and which costed more than the improvement threshold for the income year in which the assets were disposed of.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 149 - 10
Income Tax Assessment Act 1997 Subsection 152 - 80(3)
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