Private ruling: CGT exemption
Date of advice: 7 April 2026
Published: 29 June 2026
Ruling period: Year ending 30 June 20YY
Date scheme commenced: DD MM 20YY

Ruling: Q1: Will any capital gain on the disposal of your ownership interest in the property as a beneficiary be disregarded pursuant to section 118-195 of the Income tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. As the property remained the main residence of the deceased's spouse from the time of the deceased's death until you disposed of your inherited ownership interest, all the requirements in section 118-195 of the ITAA 1997 have been met. Consequently, the capital gain or loss made by you on the disposal of your inherited ownership interest in the property can be disregarded.

Relevant facts and circumstances: Prior to XXXX, the deceased purchased a property. The property's land area is less than 2 hectares. The deceased occupied the property from purchase to the date they died as their principal place of residence. On DD MM 19YY, the deceased passed away. At the time of their passing, the deceased was married to Person A (the spouse). The deceased was an Australian resident at the time of passing. On DD MM 19YY, the executors, being you and your sibling, were granted probate of the deceased's Will dated DD MM 19YY. The Will stated that the residue of the estate after payment of any debts, was left to you and your sibling in 2 equal shares. Shortly after the grant of probate, you and your sibling entered into a deed of arrangement with the spouse in which you both, as executors and beneficiaries, agreed to provide the spouse a life interest in the property and in return they agreed to relinquish, waive and release the executors and beneficiaries of the deceased estate from any further claim in respect of the Will of the deceased. Since the time the deceased passed away, the property has been the main residence of their spouse. The property has never been used to produce income. You provided documents from the Supreme Court of the relevant State, that allowed you to sell your share of the property to your sibling, while still allowing occupancy for life to the deceased's spouse. You received $X for the sale of your share of the property to your sibling.

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