| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 5010063931691
Date of advice: 3 February 2020
Ruling
Subject: CGT - deceased estate - K3 Event
Question
Are capital gains or losses that are made when shares owned by the deceased pass from the deceased estate to the beneficiary disregarded under subsection 118-60(1) of the Income Tax Assessment Act 1997 (ITAA 1997) if the beneficiary is a deductible gift recipient (DGR)?
Answer
Yes. In this case, both of the residual beneficiaries are deductible gift recipients and the deceased would have been entitled to a deduction under section 30-15 of the ITAA 1997 for the gift of shares had they been made during their lifetime. Accordingly, any capital gains or losses made from the disposal are disregarded.
This ruling applies for the following periods:
Year ended 30 June 2019
Year ending 30 June 2020
The scheme commences on:
1 July 2018
Relevant facts and circumstances
The deceased died on DDMMYYYY.
The deceased bequeathed the residue of their estate to an endorsed Deductible Gift Recipient (DGR).
The residue of the estate includes Shares
The Trustee intends to transfer the Shares from the Estate to the DGR in settlement of their entitlement under the will of the deceased.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 30-15
Income Tax Assessment Act 1997 Section 104-215
Income Tax Assessment Act 1997 Section 118-60
Income Tax Assessment Act 1997 Section 995-1