Edited version of private advice

Authorisation Number: 1052445758483

Date of advice: 5 September 2025

Ruling

Subject: Capital Gains Tax

Question 1

Can you disregard the capital gain you will make when you dispose of your ownership Interest A in the property?

Answer 1

Yes.

We will allow an extension of time for you to dispose of Interest A and disregard the capital gain or capital loss you will make on its disposal. Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'.

Question 2

Can you disregard the capital gain you will make when you dispose of your ownership Interest B in the property?

Answer 2

No.

You can't disregard the capital gain you will make when you dispose of ownership Interest B in the property. You didn't acquire this interest under the will. You acquired it in your own right after 1985 and it was never your main residence.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

The property was originally purchased by the deceased before 1985.

After 1985, the deceased passed away. The property was inherited by yourself (Interest A) and your sibling as joint tenants. You and your sibling understood that the property will pass to your Child A, as per the wishes of the deceased.

A copy of the deceased's Last Will and Testament was unable to be provided due to length of time since their passing.

Your Child A has resided in the property for most of their life. They have paid rent, not at commercial rates. You explained the reason for this was to have your Child A feel that they had a responsibility and was contributing to their wellbeing. At your Child A's own expense, they have extensively upgraded the property which has increased the value of the property.

After 1985, you purchased your sibling's 50% interest in the property (Interest B) and the title was transferred into your name. At the time, your sibling received a diagnosis of a medical condition, had large medical bills, and provided for their spouse and young children.

During the period 20XX to 20XX your family managed significant health issues. Your sibling suffered from a medical condition, your ex-spouse passed away suddenly, and your Child B passed away. Your Child A was extremely close to these family members and they were part of your Child A's support network.

Child A has managed health issues for most of their life. Child A has been on a permanent disability pension for a long time.

A copy of the letter provided by Child A's general practitioner, detailed the extent of their health issues.

You and your family have always understood that the property belongs to Child A. You provided a copy of your Will which confirms that Child A is the sole beneficiary of the property.

You will transfer the property to Child A before 30 June 20XX.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-110

Income Tax Assessment Act 1997 section 118-195

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