Private ruling: Capital gains tax – deceased estate – main residence exemption
Date of advice: 17 August 2017
Published: December 2017
Ruling period: Year ended 30 June 2017.
Date scheme commenced: 15 September 1995.

Ruling: Q1: Is any capital gain on the sale of the property disregarded? | A1: Yes.

Relevant facts and circumstances: The deceased and another individual acquired a property as joint tenants after 20 September 1985. The dwelling was used as the main residence of both the deceased and the other individual. The dwelling was never used to produce income. Some years later, the other individual passed away. The deceased continued to live at the property until they passed away a number of months later. Shortly after, the property was sold and settled by the Executor of the Estate.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-110 | Income Tax Assessment Act 1997 section 118-195

Reasons for decision: Summary: The capital gains provisions allow for concessional treatment to be given to a dwelling that was owned by a deceased person if the executors of the deceased person’s estate sell that dwelling within two years of the date of death. Any capital gain or capital loss made on the sale of such a dwelling is disregarded if the dwelling was: ● Acquired by the deceased before 20 September 1985, or ● The deceased’s main residence when they died. As the dwelling was sold by the executor within two years of the date of death, and the dwelling was the deceased’s main residence when he died, any capital gain on the sale of the property is disregarded.