Private ruling: Deceased estate and cost base
Date of advice: 22 November 2017
Published: April 2018
Ruling period: 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: A1: Yes Having considered your circumstances and the relevant factors, you can apply the first element of your ownership interests’ cost base as the market value of the dwelling on the date of deaths and the first element of your ownership interests’ reduced cost base as the market value of the dwelling on the date of deaths, for the purpose of section 128-15(4) item 3 of the ITAA 1997 at settlement date. Further information on the elements of the cost base and reduced cost base, can be found on our website ato.gov.au and entering Quick Code QC52174 into the search bar at the top right of the page.

Relevant facts and circumstances: Your relative purchased a property in 19XX and this was their main residence up until their date of death. Your relative passed away in 19XX and appointed their estate to their X children as beneficiaries and you each received an equal share as tenants in common. Y of the beneficiaries remained in the property, as this dwelling became their main residence also up to their date of deaths. The other Z did not reside in this dwelling at any time for the purpose of a main residence. One of the beneficiaries passed in 19XX and their share passed to you bringing your total share to Y/X. One other beneficiary passed in 20XX and this persons share was left to one of the other beneficiaries also making their share Y/X. This same beneficiary then also bought out a share held with another beneficiary making their total share Z/X. The beneficiary who held Z/X shares and who treated this dwelling as their main residence passed on in 20XX and these shares devolved to you, giving you full ownership interest. You became the sole owner of the property and did not make this property your main residence and the property did not produce assessable income. The property was sold in 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 128-15


Subject: Deceased estate and cost base: Does subsection 128-15(4) item 3 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to the cost base and reduced cost base of the asset in the hand of the beneficiary at settlement date?