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Edited version of private advice
Authorisation Number: 1051657557291
Date of advice: 09 April 2020
Ruling
Subject: Income tax - capital gains tax - main residence exemption for a deceased estate
Question 1
Was Individual B absolutely entitled to the property?
Answer
Yes. As the estate of Individual A was fully administered it is considered that Anthony had a vest and indefeasible interest in the property.
Question 2
Did a CGT event happen to trustee of Individual B's estate when the property was sold?
Answer
Yes. CGT event A1 occurred when the trustee disposed of the property.
Question 3
Is the trustee able to disregard some or all of the gain from the property?
Answer
Yes. The trustee is able to disregard the entire capital gain under section 118-195 of the ITAA 1997.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
Individual A passed away and owned a property which was left to Individual B.
Individual A used the property as their main residence and it was never used to produce income.
Individual B (The deceased) passed away.
The property was the deceased's main residence at time of death and the land size is less than 2 hectares.
The deceased nominated his Executor.
The will provided a bequest of the cash in the bank to one beneficiary after which his executor was to dispose of all other assets and evenly distribute the cash to all the other beneficiaries.
A contract of sale for the property was signed on xx xxx xxxx with settlement occurring on xx xxx xxxx
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-195
Income Tax Assessment Act 1997 section 104-10