Private ruling: CGT - main residence exemption
Date of advice: 8 May 2023
Published: 26 June 2023
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the full main residence exemption apply to the disposal of the property? Answer No

Relevant facts and circumstances: The deceased passed away

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

Reasons for decision: Summary: You are not entitled to a full main residence exemption in relation to the sale of the property due to Person A using it as their main residence during part of your ownership period. | Detailed Reasoning - Detailed reasoning: You are entitled to a full main residence exemption on the sale of the property if the conditions in section 118-195 of the ITAA 1997 are satisfied. These conditions are not satisfied because it was not the main residence of a relevant individual from the date that Deceased passed away until your ownership period ended. The relevant individuals identified in item 2, column 3 of the table in section 118-195 of the ITAA 1997 are: • the spouse of the deceased • an individual with a right to occupy the dwelling under the will of the deceased, and • if the property is sold by an individual to whom the ownership interest passed as a beneficiary - that individual. The beneficiary is not an individual referred to in item 2, column 3 of the table in section 118-195 of the ITAA 1997 because: • The Beneficiary was the relative of deceased and not a spouse • The Beneficiary did not have a right to occupy the property, they were only listed as a beneficiary. • The property was sold by you the trustee of deceased estate and not by the beneficiary. Consequently, there will be a capital gains implication when the property is sold as Beneficiaries main residence days do not count towards the property's exemption.

Relevant facts and circumstances: The deceased passed away in XXXX. | The deceased owned a property (The property). The property was acquired in XXXX and the deceased considered the property their main residence until they passed in XXXX. | The property was located on less than two hectares of land and has never been used for income producing purposes. | The deceased provided a life tenancy for a relative who was also named as Trustee of the deceased's estate. | The deceased's will named the remainder beneficiaries of the estate as XXXX (1/3 share) and (2/3 share). | The life tenant and their spouse (a beneficiary of the estate) occupied the property until death. However the spouse continued to reside in the property as a beneficiary under the estate until they moved to a nursing home. | At all times the beneficiary considered the property to be their main residence. | The title deed was changed to the executor's name as personal representative to the estate to enable the sale of the property. | The property was placed on the market and settlement occurred. | From the time that the deceased passed, the property was used only as the main residence by a person who was a beneficiary of the estate and disposed of the property as a beneficiary.