Edited version of private advice

Authorisation Number: 1051986841902

Date of advice: 2 June 2022

Ruling

Subject: Capital gains tax

Question

Can you disregard the capital gain on the sale of the property at xx?

Answer

Yes.

The Commissioner accepts that you were not the beneficial owner of the property before your other parent's death.

The property passed to you as a beneficiary of the estate of your late parent, xx xx.

The property was acquired on or after 20 September 1985, the property was your parent's main residence just before their death and was not being used for income producing purposes, and your ownership interest in the property ended within 2 years of your parent's death, xx xx 2020.

This ruling applies for the following period:

Year ending 30 June 20xx

The scheme commences on:

1 July 20xx

Relevant facts and circumstances

Your parents were unable to purchase a property due to neither holding permanent residency or citizenship but lived in Australia under a temporary resident visa called xx.

On xx at your parent's request, you entered into a contract to acquire the property for $xx and on xx settlement occurred.

Your parent, xxx, paid the whole of the purchase price of $xx as well as the stamp duty and associated costs.

They funded the purchase by selling the family home in Country A and used part of the balance of the sale proceeds to buy an apartment in Country A.

Immediately following acquisition renovations were carried out on the property costing approximately $xx which were paid for by your parent.

From xx to xx the property was leased to a tenant and the rent was used to pay part of the cost of renovations.

From mid-20xx to 20xx your parent used the property as their full-time main residence.

In 20xx your parent passed away and your other parent (the "deceased") inherited all their assets.

From mid-20xx to 20xx the deceased used the property as their main residence although they made irregular trips back to Country A, staying in the apartment that your parent purchased in xxxx.

From 20xx to 20xx the deceased did not return to the Country A and the property was their full-time principal residence up until their death on xx 20xx.

In the deceased's will, they appointed to be the executor and left all assets to you.

On xx 20xx you sold the property for $xx and the sale was completed on xx 20xx.

At all times from the date of purchase until your parent's death, you were only the legal owner of the property, with your parents having beneficial ownership.

Your beneficial ownership commenced as at the date of your parent's death, at which time you were then both the legal and beneficial owner.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subsection 118-195(1)