Private ruling: Capital gains tax
Date of advice: 23 July 2018
Published: September 2018
Ruling period: Financial year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will any capital gain arising from the transfer of the property from the Trustee to the three beneficiaries of the Estate be disregarded? | A1: Yes Having considered your circumstances, the Commissioner considers that the equitable title to the property has been retained by the Estate. Upon transfer of legal and equitable title of the property to the deceased’s surviving children, section 128-15 of the Income Tax Assessment Act 1997 will apply to disregard any capital gain or loss made by the Trustee.

Relevant facts and circumstances: The deceased died intestate. The deceased owned property that was purchased prior to 20 September 1985. At their date of death, the deceased was survived by four children. The deceased lived at the property as their main residence. The property was not used to produce assessable income. Two of the deceased’s children were granted letters of administration for the deceased’s estate. They transferred the property into their names as personal legal representatives. The deceased’s children then transferred the property into their own names as beneficiaries with no provision for the other children. An application was made to the Relevant Court to have the two deceased’s children removed as administrators. They were replaced with a new administrator, the Trustee. The parties have now reached a settlement and as a result, the property will be transferred to the Trustee. The property will be transferred from the Trustee to the deceased’s surviving children in equal shares as tenants in common.

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