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Edited version of private advice
Authorisation Number: 1051734293578
Date of advice: 19 August 2020
Ruling
Subject: Capital gains tax - deceased estate - absence choice
Question 1
Does section 118-205 of the ITAA 1997 apply in working out the amount of the executor's capital gain from the sale of the interest in the dwelling that person 'A' acquired post CGT
Answer
Yes. The conditions for applying section 118-205 to your situation are satisfied.
Question 2
Are person 'B' post-CGT days added to the total days calculated by using the formula in subsection 118-200(2) of the ITAA 1997 by subsection 118-205(2) of the ITAA 1997?
Answer
Yes. This is the adjustment that is made to section 118-200 because section 118-205 applies to your situation.
This ruling applies for the following periods:
Year ending 30 June 2020
The scheme commenced on:
1 July 2019
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
Person A and their spouse person B acquired a dwelling. (The dwelling)
The dwelling was acquired as joint tenants and was acquired prior to 20 September 1985.
Person B passed away on XX X 20XX. Person B post-CGT days are the number of days in the period 20 September 1985 to XX X 20XX.
Persona A acquired their half interest in the dwelling under the rule of survivorship.
At the time of person B passing the dwelling had a market value of $X.
Person A continued to reside in the dwelling until they moved into care on xx x 20xx.
The dwelling was first rented on xx x 20xx at which time the market value of the dwelling was $x.
The dwelling continued to be rented until person A death on XX X 20xx.
The dwelling was sold by the executor of person A estate for $X.
Settlement of the contract of sale took place a short time later.
The executor has made a choice to treat the dwelling as Joan's main residence until xx x 20xx.
The market value of the dwelling on xx x 20xx was $x.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 Section 108-5
Income Tax Assessment Act 1997 Section 110-25
Income Tax Assessment Act 1997 Subsection 112-25(2)
Income Tax Assessment Act 1997 Subsection 112-25(3)
Income Tax Assessment Act 1997 Section 115-25
Income Tax Assessment Act 1997 Section 116-20
Income Tax Assessment Act 1997 Section 118-145
Income Tax Assessment Act 1997 Subdivision 128