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Edited version of private advice
Authorisation Number: 1051500771389
Date of advice: 10 May 2019
Ruling
Subject: Deceased estate capital gains tax - main residence exemption
Question
Are you entitled to disregard any capital gain or capital loss made from the sale of the property at State ABC under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. Having considered the circumstances and the relevant factors, the Commissioner considers the conditions of Section 118-195 of the ITAA 1997 have been met and you are entitled to disregard any capital gain or capital loss made from the sale of the property.
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
At the time of purchase of Property B, the deceased's principal place of residence was Property A.
The intention of the purchase of Property B was to eventually downsize from Property A and move in to the Property B for retirement.
Property B was never used to generate income.
The deceased's wife died unexpectedly and the deceased moved into a nursing home due to deteriorating health.
Property A was sold.
The taxpayer moved all the belongings (incl. furniture) to Property B. The taxpayer's belongings stayed in Property B until the property was sold after their death.
Power was connected to Property B under the deceased's name until the deceased died.
The deceased changed his mailing address from Property A to the local Post Office before it was sold.
· Property A and Property B are neighbouring suburbs.
· Property B and the Nursing Home are a few suburbs away (i.e. not in close proximity to each other).
The deceased was registered on the Electoral Roll at the nursing home
The deceased made Property B their residence.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195(1)