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Edited version of private advice
Authorisation Number: 1051625110511
Date of advice: 14 January 2020
Ruling
Subject: Capital gains tax - deceased estate
Question 1
Does the CGT event on the sale of the property happen to you as executor of the deceased's Estate?
Answer
Yes. Having considered your circumstances, the Commissioner accepts that the property was held on trust for the deceased and that the deceased (and subsequently their Estate) was absolutely entitled to the property as against the trustee. Consequently, in accordance with section 106-50 of the Income Tax Assessment Act 1997, the sale of the property results in a CGT event happening to you as executor of the deceased's Estate.
Question 2
Will the Commissioner exercise his discretion under subsection 118-195(1) of the Income Tax Assessment Act 1997 and extend the two year time period to XX/XX/20XX such that you can disregard the capital gain on the sale of the property if your ownership interest ends by that date?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time to XX/XX/20XX. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You are an individual and are acting as executor for the deceased.
The deceased and their spouse purchased a property prior to 20 September 1985.
The deceased lived at the property and used the property as their primary residence from purchase until, due to poor health, they moved into respite and then an aged care facility.
A number of years ago, for certain financial reasons, title to the property was transferred to one of the deceased's adult children, Y. It agreed at the time that the property was to be held on trust for the deceased.
The deceased's spouse died intestate a number of years before the deceased died on XX/XX/20XX.
There was a legal dispute with Y in relation to the deceased's Estate.
The matter was settled by a deed of settlement that was agreed to on XX/XX/20XX which was more than two years after the deceased's death.
In accordance with the executed deed of settlement, all the parties agreed that Y has, at all material times, held the property on trust for the deceased and then their Estate.
In accordance with the deed of settlement, the property was sold and the projected settlement date is due to take place on XX/XX/20XX.
To avoid unnecessary stamp duty, title to the property was not transferred from Y to you as executor of the deceased's Estate before it was sold.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 106-50
Income Tax Assessment Act 1997 Subsection 118-195(1)