Private ruling: Capital gains tax
Date of advice: 8 August 2025
Published: 13 October 2025
Ruling period: DD MM YY | DD MM YY
Date scheme commenced: DD MM YY

Ruling: Q1: Will the transfer of your share of the inherited property to your sibling trigger a capital gains tax (CGT) event? | A1: Yes. CGT event A1 occurs when there is a change in ownership of a CGT asset under section 104-10 of the Income Tax Assessment Act 1997 (ITAA 1997). Subsection 104-10(1) of the ITAA 1997 provides that CGT event A1 happens if an entity disposes of a CGT asset. A 'disposal', as defined in subsection 104-10(2) of the ITAA 1997, occurs when there is a change of ownership from one entity to another. A 'CGT asset', as provided in section 108-5 of the ITAA 1997, is: • any kind of property, or • a legal or equitable right that is not property. In your case, you inherited a share of a property from your father's deceased estate. You subsequently transferred your share to your sibling (as a gift) who lived at the property as their principal place of residence. Therefore, the transfer of your share of the property to your sibling triggered a CGT event A1. | Q2: Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997) to allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain or capital loss you made on the disposal? | A2: Having considered your circumstances and the relevant factors the Commissioner will allow an extension of time. Therefore, you are not required to include capital gains in your assessable income in relation to the transfer of property to your sibling. Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'.

Relevant facts and circumstances: Your father purchased the property at XXXX (the property) on DD MM YY. On DD MM YY, your father passed away. Your father's will (dated DD MM YY) appointed your sibling to be the executor and trustee of the will. Your father's will awarded X% of the estate to your sibling, and X% to you. You were not involved in the formation of the will, and you were not informed of its content. Your sibling maintained full responsibility as the executor. You were not involved in the administration of the will. Communication between you and your sibling had been minimal for years. You received a copy of the will from your sibling, approximately X months after your father's passing. You indicated to your sibling that you would gift your share to them, as you were now aware of your sibling's poor health, and that the property was their primary place of residence. On DD MM YY, your sibling met with a solicitor to commence administration of the will. On DD MM YY, your sibling contacted the solicitor to commence the property transfer, as per the will. Your sibling's poor health contributed to delays in the estate administration. On DD MM YY, the registration to transfer the property ownership was completed (X% for your sibling, X% for you). You subsequently commenced action to transfer your share to your sibling. On DD MM YY, the transfer of your share to your sibling was completed.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 108-5 | Income Tax Assessment Act 1997 section 118-195