Private ruling: Deceased estate and capital gains tax
Date of advice: 3 November 2022
Published: February 2022
Date scheme commenced: 1 July 2020

Ruling: Q1: Is the capital gain made on the disposal of the property disregarded in full under section 118-195 of the Income Tax Assessment Act 1997 ? | A1: Yes Having considered your circumstances and the relevant factors, this is the straight application of the law. Further information about this can be found by searching QC 66054" on ato.gov.au. This private ruling applies for the following period: Year ended 30 June 2021

Relevant facts and circumstances: The deceased passed away leaving a will which appointed Z as the Executor of his estate. The deceased owned property which was less than 2 hectares. The deceased had acquired the property as his main residence. From the date of purchase this property was the main residence of the deceased and was used for no other purpose. Probate of the Will was granted to the Executor and subsequently the property was transmitted to the Executor of the Estate. The deceased's will provided that his spouse had a right to reside in the property. The property was the spouse's main residence and was not used to produce income. The spouse resided at the property as their main residence. Several years after the deceased's death, the beneficiary filed a Statement of Claim in relation to the Estate and their interest. The proceedings were resolved by way of Consent Orders. The Consent Orders provided that the property was to be sold and the Estate to provide the spouse with the required security deposit necessary to reside in an Aged Care facility due to their failing health. The property was listed for sale and sold to unrelated third parties. The dwelling was sold by the estate more than two years after the date of death of the deceased due to the right to occupy the property granted to the spouse under the terms of the deceased's will.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 118-195(1)