Taxation Determination
TD 1999/72
Income tax: capital gains: does the cost base modification in subsection 128-15(4) Item 1 of the Income Tax Assessment Act 1997 apply if a main residence acquired on or after 20 September 1985 is owned by joint tenants and one of them dies?
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Please note that the PDF version is the authorised version of this ruling.
FOI status:
may be releasedFOI number: I 1021107| Preamble |
| This Taxation Determination is a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and is legally binding on the Commissioner. Taxation Rulings TR 92/1 and TR 97/16 together explain when a Determination is a public ruling and how it is legally binding on the Commissioner. |
| Date of Effect |
| This Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). |
1. No. Section 128-50 rather than subsection 128-15(4) Item 1 of the Income Tax Assessment Act 1997 applies.
2. Section 128-50 applies specifically if a CGT asset is owned by joint tenants and one of them dies. Subsection 128-15(4) provides a general rule which modifies the cost base (or reduced cost base, if applicable) of certain kinds of CGT assets in the hands of a legal personal representative or beneficiary, including an interest in a dwelling that was the main residence of an individual just before they died.
3. Section 128-50, being a specific provision, applies here rather than subsection 128-15(4) Item 1 which is more generally expressed.
4. In any event, section 128-15 only applies if a CGT asset owned by the deceased:
- (a)
- devolves to their legal personal representative; or
- (b)
- passes to a beneficiary in their estate (subsection 128-15(1)).
5. If joint tenants own a main residence and one of them dies, the surviving joint tenants are taken by subsection 128-50(2) to have acquired the deceased's interest in the main residence. So the interest in the main residence does not:
- (a)
- devolve to the deceased's legal personal representative; or
- (b)
- pass to a beneficiary in the deceased's estate.
6. The effect of section 128-50 applying is that the first element of the cost base (indexed if applicable) or reduced cost base of the interest of each surviving joint tenant is a proportion of the cost base of the deceased joint tenant's interest in the main residence (as calculated in subsection 128-50(3)).
Commissioner of Taxation
15 December 1999
Previously issued as TD 1999/D42
References
ATO references:
NO 99/10480-5
BO CGT main residence summit 1999
Subject References:
asset
beneficiary
CGT asset
cost base
death
joint tenants
legal personal representative
main residence
market value
reduced cost base
Legislative References:
ITAA97 128-15
ITAA97 128-15(1)
ITAA97 128-15(4)
ITAA97 128-15(4) item 1
ITAA97 128-50(2)
ITAA97 128-50(3)