Private ruling: Capital gains tax – disposal of pre-CGT asset
Date of advice: 18 September 2017
Published: February 2018
Ruling period: 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Can the capital gain be disregarded if the asset was acquired before 20 September 1985? | A1: Yes Having considered your circumstances and the relevant factors, the capital gains tax can be disregarded if the property conforms with section 104-10(5)(a) of the Income Tax Assessment Act 1997 (ITAA 1997). Further information on ‘your home and other real estate’ can be found on our website ato.gov.au and entering Quick Code QC22166 into the search bar at the top right of the page.

Relevant facts and circumstances: Property was purchased sometime in mid-late 198X. This was the deceased’s main residence up until early 199X. Taxpayer was elderly and had suffered an illness and was subjected to 24/7 care in their home and this also meant they were unable to attend to their own personal affairs. A Power of Attorney (POA) was appointed and they conducted the sale of property in 201X. The taxpayer (deceased) passed away in mid-late 201X. The deceased had a Will and appointed a solicitors firm as their executors. The solicitors appointed a tax agent to lodge the final income tax return for the deceased’s estate. The tax agent, the solicitors and others, have completed an exhaustive search with the relevant State Land Titles Office and relevant Office of State Revenue; the deceased’s former accountant, financial advisor and POA to locate a copy of the original purchase contract for the property but a copy of the contract could still not be located. You have located some information to suggest that the property was purchased prior to 20 September 1985 (pre-CGT). You also provided annexures that indicate the purchase of this property was pre-CGT. If the property was purchased sometime pre-CGT the 6 week contractual settlement period would have been sometime in mid-late198X. A delegate for the Deputy Commissioner of Taxation conducted several searches on its own databases internally and externally and also on this occasion could not find factual results confirming the purchase date of this property.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10(5).