Edited version of private advice

Authorisation Number: 5010069452324

Date of advice: 10 September 2020

Ruling

Subject: Capital gains tax rollover relief

Question 1

Does subsection 128-15(4) item 4 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to the cost base and be the market value of the property at date of death?

Answer

Yes

Question 2

Will the Commissioner allow further time until 31 December XXXX as provided in paragraph 103-25(1)(b) of the Income Tax Assessment Act (ITAA 1997) for you to choose to apply the capital gain tax roll-over relief that arose in the XXXX financial year?

Answer

Yes

Question 3

Are you entitled to the capital gains tax roll-over under section 124-190 of the Income Tax Assessment Act (ITAA 1997) 1997?

Answer

Yes

This ruling applies for the following period:

Year ended 30 June XXXX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

The property being in Randwick Sydney was an asset of the deceased.

You entered into a contract to sell the Property at Randwick Sydney which was sold May XXXX.

The property was an asset of the deceased at the time of her death and in accordance with section 128-15(4) be the market value as at the date of death of the deceased.

The company X was incorporated October XXXX to hold the block of units held at Randwick Sydney as company title.

The deceased by the mid 1970's was 100% the sole owner of the shares in the company and held 100% of the rights of occupancy having acquired the shares held from her siblings which were inherited in the 1960's on the death of their mother.

Company X subdivided the property at Randwick into stratum units and transferred the Property at her direction to family members.

On November XXXX the deceased instructed her solicitor to transfer title in the Randwick property from company X to herself and various family members.

You obtained ownership on the death of the deceased on November XXXX as the legal personal representative.

You require to elect to apply S160ZZPG roll-over relief which applied where land on which a building or buildings were erected was subdivided into strata units or strata units and common property and immediately before and after the subdivision a taxpayer had a particular asset in relation to the land.

Under section 124-190 of the ITAA 1997 a roll-over is available if:

(a) you own property (the 'original asset') that gives you a right to occupy a unit in a building;

(b) the building's owner subdivides it into stratum units; and

(c) the owner transfers to you the stratum unit (the 'new asset') that corresponds to the unit you had the right to occupy just before the subdivision.

You have requested that the Commissioner allow you to choose to apply the CGT rollover relief outlined under section 124-190 of the Income Tax Assessment Act (ITAA) 1997 and allow the choice to be made after the lodgement date for the 20XX income tax return until 31 December XXXX.

Relevant legislative provisions

Income Tax Assessment Act 1936 section 160ZZPG

Income Tax Assessment Act 1997 section 124-190

Income Tax Assessment Act 1997 section 128-15