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Edited version of private advice
Authorisation Number: 1051665069364
Date of advice: 29 April 2020
Ruling
Subject: Capital gains tax- deceased estates- main residence exemption
Question
Can you disregard any capital gain or loss you make on the disposal of the dwelling?
Answer
Yes. The Commissioner accepts that in your circumstance the dwelling continued to be the deceased's main residence up until the time of deceased's death, even though the deceased was in a nursing home. The dwelling was not being used to produce assessable income and will be disposed of within two years of the date of the deceased's death.
Further information about the main residence exemption can be found by searching 'QC 22168' on ato.gov.au.
Further information about deceased estates and capital gains tax can be found by searching 'QC 52245' on ato.gov.au.
This ruling applies for the following period:
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased and their spouse acquired a dwelling sometime after 20 September 1985. They lived in it as their main residence.
The deceased's spouse passed away several years later.
Their spouse's share of the dwelling passed to the deceased upon the spouse's death. The deceased continued to live in the dwelling as their main residence.
The deceased broke an ankle requiring hospitalisation.
The deceased's child would travel from their home and stay with the deceased in the dwelling for periods of one month at a time.
The deceased's other children also helped to provide care.
The deceased's condition deteriorated and required a high level of care.
The deceased was admitted to an aged care facility.
The deceased's household contents, personal belongings and other assets remained in the dwelling.
The deceased had intended on returning to the dwelling upon recovery.
The deceased died before the deceased could go home to the dwelling, two and a half years after first being admitted.
The dwelling was not used to produce assessable income.
Probate was granted.
Two of the deceased's children were appointed Executors of the Estate.
The Executors intend to sell the dwelling with settlement occurring within two years of the deceased's death.
Assumption
For the purpose of this ruling it is assumed that the sale of the dwelling will take place with settlement to occur within two years of the deceased's death.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 118-110
Income Tax Assessment Act 1997 section 118-195