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Edited version of private advice
Authorisation Number: 1052132372022
Date of advice: 28 June 2023
Ruling
Subject: Pre CGT asset - joint tenants - effect of death
Question 1
Was the deceased's interest in the property acquired by agreement on prior to 20 September 1985, a pre-CGT asset in accordance with section 149-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. The documents provided state the agreement to acquire the land occurred at a date before 20 September 1985. The Commissioner is satisfied that in the absence of a purchase contract, the other documents provided show the acquisition of the property occurred pre-CGT.
Question 2
Did the deceased acquire their joint tenants interest in the property on their date of death in 20XX, in accordance with section 128-50 of the ITAA 1997?
Answer
Yes. The deceased and their partner, also deceased, owned 50% of the property as joint tenants. On the death of their partner, their interest in the property was taken to have passed to the deceased as the surviving owner. As such, this interest in the property is treated as a post-CGT asset and acquired at market value on the date of death of their partner.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
On a date prior to 20 September 1985 an agreement was made for the deceased and their partner as joint tenants to purchase an interest of a property. The remaining interest was owned by a related party.
Information provided makes reference to an agreement dated prior to 20 September 1985.
In 20XX the deceased's partner passed away and their interest in the property passed to the deceased as the surviving joint tenant.
The deceased died in 20XX.
The deceased's interest in the property will be transferred to a related party in the 20XX income year.
Relevant legislative provisions
Section 149-10 of the Income Tax Assessment Act 1997
Section 128-50 of the Income Tax Assessment Act 1997