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Edited version of private advice
Authorisation Number: 1052196412907
Date of advice: 27 November 2023
Ruling
Subject: CGT - deceased estate
Question
Is any capital gain or loss you make due to the transfer of the property to a beneficiary disregarded?
Answer
Yes.
Division 128 of the Income Tax Assessment Act 1997 (ITAA 1997) deals with capital gains tax (CGT) consequences that arise from a deceased estate. Any capital gain or loss made by a trustee of a deceased estate or legal personal representative (LPR) is disregarded under section 128-15 of the ITAA 1997 if an asset of the estate 'passes' to a beneficiary in accordance with section 128-20.
This ruling applies for the following period:
Year ending XX/MM/CCYY
The scheme commences on:
XX/MM/CCYY
Relevant facts and circumstances
The deceased died on XX/MM/CCYY.
The deceased left a will which noted that the property at a place (Certificate of Title Vol XXXX Folio XXX) be held on trust for a beneficiary for and during their lifetime, and on their death for remainderman 1 and remainderman 2 as tenants in common in equal shares. The trust was created by the will of the deceased.
Probate of the will was granted to the executors and trustees on XX/MM/CCYY.
A drafted deed of family arrangement between a beneficiary (life tenant) and remaindermen, as executors and trustees of the will, proposes to terminate the trust created by the will and undertake a transfer of the property to the life tenant.
You will transfer the property to the life tenant in accordance with the deed of family arrangement.
Relevant legislative provisions
Income Tax Assessment Act 1997 Division 128
Income Tax Assessment Act 1997 section 128-15
Income Tax Assessment Act 1997 section 128-20