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Edited version of private advice
Authorisation Number: 1052242809214
Date of advice: 19 April 2024
Ruling
Subject: CGT - main residence exemption
Question
Are you entitled to the full main residence exemption on the disposal of the property?
Answer
Yes. Having considered your circumstances and the relevant factors, the Commissioner agrees the property was acquired under the Will of the deceased and in accordance with our view in Taxation Determination TD 1999/74 Income tax: capital gains: in what circumstances does a trustee of a deceased estate acquire an ownership interest in a dwelling 'under the deceased's will' for the purposes of subsection 118-210(1) of the Income Tax Assessment Act 1997?
The ownership interest in the replacement property was acquired for occupation by the deceased's spouse as their main residence who had a right of occupancy as per the deceased's will. The requirements in subsection 118-210(3) of the Income Tax Assessment Act 1997 (ITAA 1997) are satisfied and you can disregard any capital gain or capital loss made on the disposal of the property.
Law Administration Practice Statement PS LA 2003/12 Capital gains tax treatment of the trustee of a testamentary trust confirms the Commissioner's longstanding administrative practice of treating the trustee of a testamentary trust in the same way as a legal personal representative for capital gains tax purposes.
This ruling applies for the following period:
Year ending 30 June 20YY
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
The deceased passed away several years ago.
Probate was granted in the year following the date of death.
The deceased's will created a testamentary trust whereby:
• Their spouse was the sole beneficiary in their estate.
• Their children were remaining beneficiaries (remainder interest's).
• Trustees had the power to sell the deceased's home (Original Property) and buy an alternative main residence (New Residence) for the deceased's spouse to live in.
The deceased spouse lived in the new property as their main residence until they passed.
The new property was then sold several months after the spouse passed.
Relevant legislative provision
Income Tax Assessment Act 1997 section 118-210