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Edited version of private advice
Authorisation Number: 1051708924640
Date of advice: 2 July 2020
Ruling
Subject: Capital gains tax - deceased estate
Question
Will the capital gain resulting from the disposal of the Property be disregarded as a result of item 2(a) or 2(b) of ss118-195(1)(b) of the Income Tax Assessment Act 1997?
Answer
Yes. The Property was purchased prior to 20 September 1985 and was the main residence of the Deceased's spouse until settlement. Additionally, the Deceased's spouse had a right to occupy the residence under the Deceased's will. These facts satisfy ss118-195(1)(b) of the Income Tax Assessment Act 1997 and the capital gain from the disposal of the residence will be disregarded.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The Deceased and the Deceased's spouse purchased their main residence (the Property) prior to 20 September 1985.
The Deceased died in 20xx.
The Deceased's will provided the Deceased's spouse with a right to occupy the Property for as long as they shall live or require.
The Trustee entered into a contract to sell the property in 20xx. Settlement occurred approximately 12 months later.
The long settlement was put in place so the Deceased's spouse could find suitable aged care accommodation.
The Deceased's spouse treated the Property as their main residence until settlement.
The Estate realised a capital gain on the sale of the Property.
Relevant legislative provisions
s118-195(1) Income Tax Assessment Act 1997