Private ruling: Capital gains tax - deceased estate - acquisition date and disposal of property
Published: November 2011
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015
Date scheme commenced: 1 July 2011

Ruling: Q1:  | A1: 

Relevant facts and circumstances: Your parent A was the sole registered proprietor and beneficial owner of a commercial property (the property). Your parent died in mid 19XX. Under your parent A's last Will and Testament dated late 19XX you inherited the property after the death of your parent B. Probate of your parent A's Will was granted to your parent B in early 19XX, as executor of the Will. Your parent B continued to hold the property as trustee of your parent A's estate until their death in mid 19XX. Following the death of your parent B the legal title of the property was transferred into your name in late 19XX. There have been no buildings or other improvements undertaken to the property on or after 20 September 1985. You will dispose of the property. You have provided copies of the following documentation to support your application and these documents are to be read with and forms part of your application for the purpose of this ruling: · Probate Jurisdiction in the Supreme Court of an Australian capital city for your parent A, and · the last Will and Testament of your parent A.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 128-15 | Income Tax Assessment Act 1997 Section 102-20 | Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 128-20

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. A capital gain or capital loss is made when a capital gains tax (CGT) event happens to a CGT asset you own. However, there is generally an exception for assets acquired by an individual before 20 September 1985. While it is clear that an asset has passed to a beneficiary once legal ownership of the asset has transferred to the beneficiary, we consider that an asset can pass to a beneficiary prior to transfer if the beneficiary becomes absolutely entitled to the asset as against the trustee. If you acquire an asset owned by a deceased person as a beneficiary under the deceased's Will, you are taken to have acquired the asset on the day the person died. If that was before 20 September 1985, you disregard any capital gain or capital loss you make from the asset. In this case, your parent A owned the property, and under their Will they left this property to you upon the death of your parent B. Your parent B transferred the property into their name as trustee prior to 20 September 1985, in accordance with your parent A's Will The title of the property was transferred into your name upon the death of your parent B after 20 September 1985. This transfer was to effect the transfer of Lot X into your name as the beneficiary named in your parent A's Will. Your acquisition date of Lot X is the date your parent A died in mid 19XX. A CGT event A1 will occur upon the disposal of the property and as you acquired it before 20 September 1985, any capital gain or capital loss made on its disposal is disregarded.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Subject: Capital gains tax - deceased estate - acquisition date and disposal of property: Question: Is the capital gain or capital loss made on the disposal of the property you acquired from your parent A's estate disregarded?