Income Tax Assessment Act 1997



Division 118 - Exemptions  

Subdivision 118-B - Main residence  

Dwellings acquired from deceased estates

SECTION 118-195   Dwelling acquired from a deceased estate  


A *capital gain or *capital loss you make from a *CGT event that happens in relation to a *dwelling or your *ownership interest in it is disregarded if:

(a) you are an individual and the interest *passed to you as a beneficiary in a deceased estate, or you owned it as the trustee of a deceased estate; and

(b) at least one of the items in column 2 and at least one of the items in column 3 of the table are satisfied; and

Beneficiary or trustee of deceased estate acquiring interest
Item One of these items is satisfied And also one of these items
1 the deceased *acquired the *ownership interest on or after 20 September 1985 and the *dwelling was the deceased's main residence just before the deceased's death and was not then being used for the *purpose of producing assessable income your *ownership interest ends within 2 years of the deceased's death, or within a longer period allowed by the Commissioner
2 the deceased *acquired the *ownership interest before 20 September 1985 the *dwelling was, from the deceased's death until your *ownership interest ends, the main residence of one or more of:
(a) the spouse of the deceased immediately before the death (except a spouse who was living permanently separately and apart from the deceased); or
(b) an individual who had a right to occupy the dwelling under the deceased's will; or
(c) if the *CGT event was brought about by the individual to whom the *ownership interest *passed as a beneficiary - that individual

(c) the deceased was not an *excluded foreign resident just before the deceased ' s death.

Note 1:

You may make a capital gain or capital loss if the dwelling was used for the purpose of producing assessable income: see section 118-190 .

Note 2:

In some cases the use of a dwelling to produce assessable income can be disregarded: see sections 118-145 and 118-190 .

Note 3:

There are special rules for dwellings acquired before 7.30 pm on 20 August 1996. These rules also affect the operation of section 118-192 and subsections 118-190(4) and 118-200(4) : see section 118-195 of the Income Tax (Transitional Provisions) Act 1997 .


For the purposes of a provision of this Subdivision that applies the table in subsection (1):

(a) disregard paragraphs (a) and (b) in column 3 of item 2 of the table if, just before the deceased ' s death, the deceased was an *excluded foreign resident; and

(b) disregard paragraph (c) in column 3 of item 2 of the table if, at the time the relevant *CGT event happened, the individual was an excluded foreign resident.


The other provisions that apply the table include paragraph 118-192(3)(b) , subsection 118-200(2) , paragraph 118-225(3)(c) and section 118-260 .

Only these *CGT events are relevant:

(a) CGT events A1, B1, C1, C2, E1, E2, F2, K3, K4 and K6 (except one involving the forfeiting of a deposit); and

(b) a CGT event that involves the forfeiting of a deposit as part of an uninterrupted sequence of transactions ending in one of the events specified in paragraph (a) subsequently happening.


The full list of CGT events is in section 104-5 .


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