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Edited version of private advice
Authorisation Number: 1052079505654
Date of advice: 25 January 2023
Ruling
Subject: CGT - deceased estate
Question
Will the Trustee for the Estate of the Late XXX be assessed under section 99 or 99A of the Income Tax Assessment Act 1936 in relation to capital gains?
Answer
No.
This ruling applies for the following period:
Income year ended 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
XXX passed away on XX May 20XX leaving a Will (the Will).
On XX October 20XX, probate of the Will was granted to the Executors of the Estate of XXX (the Estate). XXX was an appointed Executor (the Executor).
XXX (the Beneficiaries) undertook proceedings against the Estate for further provision from the Estate's assets.
On XX July 20XX, the Executor entered a settlement agreement with the Beneficiaries (the Settlement Agreement) whereby the Executor was required to pay amounts of:
a. XXX
The Settlement Agreement required the Executor to liquidate certain assets of the Estate and pay the amounts as stated in the Settlement Agreement to the Beneficiaries within XX of the date of the agreement.
The Executor satisfied the terms of the Settlement Agreement and applied the proceeds from the liquidation of the assets of the Estate to the liabilities owing to the Beneficiaries during the income year ended 30 June 20XX. Upon this occurring, the Beneficiaries became presently entitled to the assets of the Estate and the Executor ceased to be assessable for capital gains made on the disposal of same.
Other than a potential tax liability and legal and accounting costs relating to administration of the Estate, all liabilities of the Estate have been met and the retained assets are held for the benefit of the principal beneficiary (XXX).
At all relevant times during the 20XX income year, the Beneficiaries were Australian tax residents and were not under any legal disability.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 97
Income Tax Assessment Act 1936 Section 98
Income Tax Assessment Act 1936 Section 99
Income Tax Assessment Act 1936 Section 99A