Edited version of private advice

Authorisation Number: 1052200980849

Date of advice: 18 December 2023

Ruling

Subject: CGT - deceased estate

Question

Will the Estate of XXX have a CGT event from the sale of the property?

Answer

Yes. CGT event A1 happens when there is a change of ownership of an asset. The sale of XXX is an A1 event and therefore subject to CGT.

The contact for the sale of the property was entered into between the parties on 20XX, therefore the capital gain is declared in the 20XX income tax return for the Estate of XXX.

Question 2

Will the date of acquisition of the property for the estate be the deceased's date of death?

Answer

Yes. Subsection 128-5(3) of the Income Tax Assessment Act 1997 sets out the rules that apply to CGT assets that are owned by a taxpayer just before their death which pass to the taxpayer's legal personal representative as a result of the taxpayer's death. The legal personal representative is taken to have acquired the asset on the day the taxpayer died.

The Estate of XXX acquired the property on the date of her death on 20XX.

This ruling applies for the following period:

30 June 20XX

The scheme commenced on:

20XX

Relevant facts and circumstances

XXX purchased the property at XXX in 19XX.

XXX died intestate in 19XX.

The estate was never administered, and the Certificate of Title never changed.

The child and the family were residing in the dwelling prior to their death.

The family continued to live in the dwelling until their deaths.

The family paid for all household expenditure and continued to meet the (original) mortgage repayments until the mortgage was discharged in full.

The child died in 19XX. The Will bequeathed the entire estate to XXX.

It was discovered that the Certificate of Title for the property was still in the name of XXX. The Certificate of Title had never been changed.

The XXX died in 20XX. The deceased's Will bequeathed the entire estate to XXX. The Will also provided for XXX predeceasing with the estate devised and bequeathed to the trustees.

Probate was granted to XXX by the Supreme Court of XXX in 20XX to administer both the late XXX and the late XXX estates.

The Certificate of Title was never changed due to the late XXX residing in the until their death in 20XX.

An adverse possession claim was lodged with XXX in 20XX. The registered owner on the Historical Title for XXX was changed from XXX to XXX in 20XX.

The change in the title's ownership to XXX was in the capacity as Executrix for the Estate of XXX. All documents lodged for the adverse possession claim, including the Title's Office were in the name of XXX as Executrix for the Estate of XXX.

The property was sold in 20XX with settlement in 20XX.

The dwelling has never been rented or income-producing and has remained vacant until the property was sold/settled.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 104-10

Income Tax Assessment Act 1997 subsection 128-15(3)