Private ruling: CGT - deceased estate
Date of advice: 12 December 2025
Published: 2 February 2026
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Did the legal personal representative of the deceased's estate make a capital gain from the sale of a partial interest in a property at XX that was the deceased's main residence when the deceased died? | A1: Yes. Subsection 128-15(3) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that where an asset passes to a beneficiary in one of the methods listed in section 128-20 of the ITAA 1997, the executor can disregard any capital gain or loss made on the passing of that asset. The beneficiaries can disregard any capital gain or loss pursuant to section 128-10 of the ITAA 1997. As consideration was provided for part of the property, section 128-20 of the ITAA 1997 does not apply to that portion. Consequently, a capital gains tax event will occur in respect of that portion. Section 128-15 of the ITAA 1997 provides that the executor, or beneficiary is taken to have acquired the property on the day the deceased died. Any capital gain or loss is disregarded where an asset passes from the legal personal representative to a beneficiary of a deceased estate. In accordance with paragraph 128-15(3) of the ITAA 1997 any capital gain or capital loss the legal personal representative makes if the asset passes to a beneficiary in the estate is disregarded. | Q2: Will the Commissioner exercise his discretion to extend the 2-year period to disregard the CGT event happening in relation to the partial sale of the deceased main residence for under 118-195 (1) (ITAA) 1997? | A2: Yes. Having considered your circumstances and the relevant factors the Commissioner will allow an extension of time. Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'.

Relevant facts and circumstances: The deceased passed away on DD MM 20YY. The dwelling is located at XX (the property). The deceased also owned a property at XX (the other property). The property was initially acquired by the deceased and their spouse as joint tenants. On DD MM 20YY, the deceased's spouse passed away and their ownership passed to the deceased by survivorship. The deceased acquired their interest before 20 September 1985. The property was the main residence of the deceased just before they passed away and was not used to produce assessable income at that time. Prior to the deceased's death, a beneficiary moved into the property to reside with the deceased and provide care. After the deceased's death, a beneficiary continued to use the property as their main residence. The property was situated on less than two hectares of land. The deceased had a Will which was dated DD MM 20YY. There were numerous difficulties prevailing between the named executors that impeded the proper administration of the estate and in the light of those difficulties the Court revoked the grant to the executors and replaced by a grant to an Administrator. The property was transferred shortly after the cessation of the legal proceedings.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-195 | Income Tax Assessment Act 1997 section 128-10 | Income Tax Assessment Act 1997 section 128-15 | Income Tax Assessment Act 1997 section 128-20