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Edited version of private advice
Authorisation Number: 1052368861912
Date of advice: 03 March 2025
Ruling
Subject: Capital gains tax - deceased estates
Question 1
Can you disregard any capital gain on the transfer of the property to Person A as beneficiary?
Answer 1
Yes.
The property will pass to the beneficiary in accordance with paragraph 128-20(1)(d) of the Income Tax Assessment Act 1997 (ITAA 1997) when the Deed of Arrangement is executed. In accordance with subsection 128-15(3) of the ITAA 1997, any capital gain on transfer of the property can be disregarded.
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
On Date one, the deceased purchased a house(the property).
The deceased died intestate several months ago.
The relevant court issued a grant of Letters of Administration to the deceased's spouse (Person A) shortly thereafter.
Pursuant to the laws of intestacy, Person A is entitled to a fixed sum from the deceased's estate plus a percentage of the remainder of the estate.
The remainder of the estate is to be divided between the children of Person A and the deceased.
Person A wished to receive a greater share of the estate.
The trustee and all the beneficiaries have agreed to enter into a Deed of Family Arrangement (the deed) to settle Person A's claim against the estate. They will sign the deed shortly.
Clause 3.1.1 of the deed provides that: the property shall be distributed to Person A in their capacity as beneficiary.
Person A will not provide any consideration for the property.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 128-15
Income Tax Assessment Act 1997 section 128-20
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