Private ruling: Capital gains tax - main residence - deceased estate - disposal
Published: June 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: A2: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 102-20 | Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 118-195 | Income Tax Assessment Act 1997 Section 118-200 | Income Tax Assessment Act 1997 Section 118-145 | Income Tax Assessment Act 1997 Section 128-15

Reasons for decision: Summary: A CGT event A1 happens if you dispose of a CGT asset. You dispose of a capital gains tax (CGT) asset if a change of ownership occurs from you to another entity, whether because of some act or event or by operation of law. Further, the capital gain or capital loss is made at the time of the event. A capital gain is made if the amount received (called capital proceeds) from the disposal exceeds the cost base of the CGT asset. Main Residence - Full Exemption If a deceased person's dwelling devolves to you as the trustee of their estate, you may be exempt or partially exempt when a CGT event happens to it. Generally, a trustee can disregard a capital gain or capital loss made on the disposal of the deceased's main residence if the trustees' ownership interest ends within two years of the deceased's death or from the deceased's death until it is disposed of, if it was the main residence of one or more of: · the spouse of the deceased immediately before the deceased's death, or · an individual who had a right to occupy the dwelling under the deceased's will or you as beneficiary. In your case, your ownership interest did not end within the two years of the deceased's date of death, and it was not the main residence of an individual who had a right to occupy the dwelling under the deceased's will. While the deceased's spouse did occupy the dwelling, it was not their main residence for all of your ownership period; therefore, you are not entitled to the main residence exemption. In your situation a partial exemption (or no exemption) may be available as the spouse of the deceased occupied the dwelling for part of your ownership period. You calculate the capital gain or capital loss on the dwelling as follows: Capital gain x non - main residence days divided by total days Where, the capital gain is calculated as the difference between the capital proceeds and the cost base of the dwelling. Where, non-main residence days are the total number of days from the death of the surviving spouse until your ownership interest ends. Where, total days are the number of days in the period from the deceased's death until your ownership interest ends.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Question: 1: Is any capital gain made on the disposal of the deceased's property disregarded? | Question: 2: Is any capital gain made on the disposal of the deceased's property disregarded in part? | Relevant facts: You are an administrator of an estate. | The deceased did not leave a will. | The deceased owned a property which was purchased prior to 19 September 1985. | The property was occupied by the deceased's spouse until their death, which was more than two years after the deceased's death. | You have supplied a number of documents which forms part of and should be read in conjunction with this private ruling: | The property has recently been sold.