Private ruling: CGT - deceased estate
Date of advice: 27 November 2023
Published: 15 January 2024
Ruling period: Year ending XX/MM/CCYY
Date scheme commenced: XX/MM/CCYY

Ruling: Q1: Is any capital gain or loss you make due to the transfer of the property to a beneficiary disregarded? | A1: Yes. Division 128 of the Income Tax Assessment Act 1997 (ITAA 1997) deals with capital gains tax (CGT) consequences that arise from a deceased estate. Any capital gain or loss made by a trustee of a deceased estate or legal personal representative (LPR) is disregarded under section 128-15 of the ITAA 1997 if an asset of the estate 'passes' to a beneficiary in accordance with section 128-20.

Relevant facts and circumstances: The deceased died on XX/MM/CCYY. The deceased left a will which noted that the property at a place (Certificate of Title Vol XXXX Folio XXX) be held on trust for a beneficiary for and during their lifetime, and on their death for remainderman 1 and remainderman 2 as tenants in common in equal shares. The trust was created by the will of the deceased. Probate of the will was granted to the executors and trustees on XX/MM/CCYY. A drafted deed of family arrangement between a beneficiary (life tenant) and remaindermen, as executors and trustees of the will, proposes to terminate the trust created by the will and undertake a transfer of the property to the life tenant. You will transfer the property to the life tenant in accordance with the deed of family arrangement.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 128 | Income Tax Assessment Act 1997 section 128-15 | Income Tax Assessment Act 1997 section 128-20