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Edited version of private advice
Authorisation Number: 1051688141263
Date of advice: 29 May 2020
Ruling
Subject: CGT - deceased estate - absence rule.
Question
Are you entitled to disregard any capital gain or capital loss made from the sale of the property under subsection 118-145 (1) of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes.
Having considered your circumstances and the relevant factors, the Trustees of the Estate will not be subject to any capital gains tax on the sale of the deceased's main residence. As there was no interest in another dwelling, the deceased could choose the absence rule under subsection 118-145 of the Income Tax Assessment Act 1997 (ITAA 1997) to treat the dwelling as her main residence.
Further information about the treatment of a dwelling as your main residence after you move out can be found by searching 'QC 52246' on ato.gov.au
This ruling applies for the following period:
Year ended 30 June 2020
The scheme commences on:
1 July 2019
Relevant facts and circumstances
The deceased passed away.
Prior to passing the deceased had considered the property as their main residence. The property was not used to produce assessable income.
The property was the deceased's only main residence from when it was acquired as joint tenants with their deceased spouse until the date of their death. When the spouse passed under the rule of survivorship the property had been solely owned by the deceased.
Prior to their passing the deceased was in residence at an aged care facility for a number of months following a fall and ill health.Under the absence rule the deceased still considered the property as their main residence.
The property was placed on the market prior to the deceased's passing.A contract of sale for the property was signed on xx xxx xxxx with settlement occurring on xx xxx xxxx.
The deceased passed after settlement of their main residence.
Probate for their estate was granted.
The deceased'sestate included the residential accommodation bond and balance of the proceeds of the sale of the property.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-195(1)
Income Tax Assessment Act 1997 subsection 118-145
Income Tax Assessment Act 1997 subsection 118-110