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Edited version of private advice
Authorisation Number: 1051606291595
Date of advice: 15 November 2019
Ruling
Subject: Capital Gains Tax (CGT) on a pre-CGT deceased estate asset
Question
Did the sale of the deceased's property incur a capital gains tax (CGT) liability?
Answer
No
If you acquire an asset held by a deceased person as their legal personal representative or beneficiary, you are taken to have acquired the asset on the date the person died. If that was before 20 September 1985, you disregard any capital gain or loss you make on the sale of the asset.
In your case, the deceased died prior to 1985. The ending of the spouse's life interest upon their death will have no impact on the CGT status of the residual beneficiaries. The property has retained its pre-CGT status and any capital gain is disregarded.
This ruling applies for the following period:
Year ending 30 June 2020
The scheme commences on:
1 July 2019
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.
The deceased purchased land and built a house on it a number of years prior to 20 September 1985. The dwelling at the property was their main residence along with their spouse.
The deceased died prior to 20 September 1985 and their will made provision for their spouse to reside in the family home until their death or remarriage. The estate was then to be divided between their children.
The spouse remained living in the property until their death.
The property was sold the following year.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 108-5
Income Tax Assessment Act 1997 Section 109-5
Income Tax Assessment Act 1997 Section 128-10
Income Tax Assessment Act 1997 Section 128-15