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Edited version of your private ruling
Authorisation Number: 1012077619300
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Ruling
Subject: Capital gains tax - deceased estate - transfer of shares
Question: Can you as trustee of the deceased estate make the choice under section 115-230 of the Income Tax Assessment Act 1997 to be assessed on the capital gain?
Answer: No.
This ruling applies for the following period
Year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You are the executor and trustee for a deceased estate.
The deceased died in mid 1991.
Probate was granted shortly after that date.
Under a clause in the deceased's will it stipulates a number of conditions that must be met in relation to deceased assets
You have agreed to grant the deceased's spouse an amount of capital as per the terms of the deceased's will.
A portion of the share portfolio held in the name of the estate has been transferred in specie to the deceased's spouse.
The transfer of the shares will trigger a disposal of a capital gains tax (CGT) asset.
The trust is still in operation.
You have provided a copy of the following documentation to support your application and these documents are to be read with and forms part of your application for the purpose of this ruling:
o the last will and testament of the deceased.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 115-230
Income Tax Assessment Act 1997 Section 104-10
Reasons for decision
While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.
A capital gain will be made by you as the trustee of a deceased estate when you transfer some of the deceased's shares to his spouse.
A trustee of a resident testamentary trust can make a choice that has the effect that the trustee will be assessed on the capital gains of the trust if the gains would otherwise form part of a share of a net income of the trust estate that would be included in the assessable income of a beneficiary who could not benefit from them.
In your case, the beneficiary will benefit from the portfolio of shares that she acquired from the deceased estate, as such, the choice cannot be made.