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Edited version of your private ruling
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Ruling
Subject: Capital gains tax - deceased estate
Question:
Is the interest in the property which passed to you as a beneficiary under your parent's will considered to be a pre capital gains tax (CGT) asset?
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
Your parents acquired a property some time in the 1950's as joint tenants.
Your parent A died some time in the 1990's.
Your parent B acquired your parent A's interest in the property.
Your parent B died some time later leaving the property to their children.
The property has never been rented or used as a principal primary residence.
The property was used as a holiday home.
The property has now been disposed of.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 128-15
Income Tax Assessment Act 1997 Section 128-20
Income Tax Assessment Act 1997 Section 128-50
Reasons for decision
If you acquire an asset owned by a deceased person as their legal personal representative or beneficiary, you are taken to have acquired the asset on the day the person died.
Therefore, upon the death of your parent B you are taken to have acquired your interest in the property on your parent B's date of death in 2004, making the property a post CGT asset.
Please note: for the purpose of establishing the cost base of the property, your parent B acquired two interests in the property. Your parent B's first interest (50%) was acquired some time in the 1950's when they and your parent A acquired the property, a pre-CGT interest. Your parent B then acquired their second interest (50%) some time in the 1990's upon the death of your parent A, a post CGT interest.
For more information of deceased estates please see the enclosed information which has been taken from the Guide to capital gains tax 2010-11 (NAT 4151). Information is also available on our website - www.ato.gov.au.