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Edited version of private advice
Authorisation Number: 1051563937129
Date of advice: 15 August 2019
Ruling
Subject: Capital gains tax
Question
Will there be capital gains tax payable on the disposal of the inherited dwelling?
Answer
No.
If you sell a capital asset, such as real estate or shares, you usually make a capital gain or a capital loss. As the amount of money you received when you disposed of the property was less than the market value of the property at the date of the deceased's death, you have made a capital loss.
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased acquired a property for approximately $XX after 20 September 1985 (the property).
The property was the deceased's main residence.
The deceased died several years later.
The market value of the property at the time of the deceased's death was approximately $XX
The deceased had written an informal will that had not been signed the night before their death.
The matter went through the Supreme Court with Letters of Administration issued two years after the deceased's death.
Administration of the estate was granted to the deceased's parent (you).
You sold the property for less than the market value of the property at the time of the deceased's death.
Settlement took place over two years after the deceased's death.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 104-10(4)
Income Tax Assessment Act 1997 subsection 128-15(4)