Private ruling: A deceased estate and capital gains tax (CGT)
Date of advice: 14 January 2019
Published: April 2019
Ruling period: Year ending 30 June 2019
Date scheme commenced: 1 July 2018

Ruling: Q1: Is the capital gain or loss that you make from the sale of the Property disregarded under section 118-195 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. The Property was the deceased’s main residence and not used by them to produce income. You acquired your interest in the Property as a beneficiary of the deceased’s estate and during your entire ownership period the Property has been the main residence of the deceased’s spouse. Accordingly the requirements of section 118-195 of the ITAA 1997 have been met and any capital gain or loss you make will be disregarded. Further information about deceased estates and CGT can be found by searching 'QC 52250' on ato.gov.au

Relevant facts and circumstances: You inherited an ownership interest in the Property after the death of your relative, on a date after 19 September 1985. At the time of their passing, your relative and their spouse were living in the house as their main residence and it was not being used to produce assessable income. The Property was not used at any point after their passing for the purpose of producing assessable income. A contract for the sale of the Property has been signed. Your deceased relative’s spouse will continue to live in the Property as their main residence until settlement occurs. The contract has gone unconditional and is due to settle on 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-195