Private ruling: CGT - deceased estate
Date of advice: 22 August 2025
Published: 27 October 2025
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Does the estate trust need to declare any capital gains tax in relation to the transfer of the Property to the beneficiary in the 20XX/20XX tax return? | A1: No. Any capital gain or capital loss made by the trustee of the testamentary trust on the in-specie distribution of the Property to the beneficiary is disregarded under subsection 128-15(3) of the Income Tax Assessment Act 1997 (ITAA 1997). As a result of the operation of Law Administration Practice Statement PS LA 2003/12 Capital gains tax treatment of the trustee of a testamentary trust, the trustee of the testamentary trust is treated in the same way as the Legal Personal Representative for the purposes of subsection 128-15(3) of the ITAA 1997.

Relevant facts and circumstances: 1. The Deceased and their spouse purchased land and in YYYY built a home in which they lived as their main residence. 2. The Deceased's spouse died in YYYY. 3. In YYYY the Deceased was diagnosed with dementia and their child (Deceased's Child) moved into the family home to care for them. 4. The Deceased's Child has been living in the Deceased's home as their main residence ever since. 5. The Deceased moved into a nursing home on DDMMYYYY and passed away DDMMYYYY. 6. The Deceased's Child is the executor of the will and one of 2 beneficiaries under the trust of the Deceased's estate. 7. Under the terms of the deceased's will a trust was created to hold the residuary estate for the Deceased's Child and Deceased's other child as tenants in common in equal shares. 8. The administration of the Deceased's estate was undertaken with the Deceased's other child receiving payments of $X on DDMMYYYY and $X on DDMMYYYY in satisfaction of her equal share in the residuary estate. 9. The Property was transferred in specie to the Deceased's Child's name on DDMMYYYY. 10. The property is less than 2 hectares. 11. At no time has the Property been used for an income producing or business purpose nor any business expense claimed in relation to the Property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 128-15