Private ruling: Capital gains tax - deceased estate - disposal of dwelling
Published: January 2014
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Is the acquisition date of the property you acquired from your parent's estate their date of death? | A1: Yes. | Q2: Are you liable for capital gain tax (CGT) on the disposal of the property? | A2: No.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. Your parent passed away prior to 20 September 1985. You have a number of siblings and they are the beneficiaries of your parent's estate. Your parent worked incredibly hard during their lifetime and they left each child a property. A specified property was bequeathed to you.by your parent. Your sibling was appointed the executor of your parent's estate and all of your parent's assets, including your property was transferred to your sibling in their capacity as the executor of the estate upon probate being granted prior to 20 September 1985. Your sibling mistakenly transferred a share in each property to themselves, your sibling and yourself as tenants in common as opposed to transferring your property to you. After 20 September 1985, you and siblings realised that the properties had been transferred into joint names. The same year the properties were transferred into the beneficiaries' name as per your parent's will. Your property was transferred solely into your name. Approximately 18 months ago you disposed of your property.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Section 128-15 | 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. The most common CGT event is CGT event A1, which occurs when you dispose of a CGT asset. The time of the event is when you enter into the contract for its disposal or if there is no contract - when a change of ownership occurs. CGT event A1 occurred when you disposed of your property. | Detailed Reasoning - Deceased estate: An asset passes to a beneficiary in an estate if the beneficiary becomes the owner of the asset under the will. If you acquire an asset owned by a deceased person as a beneficiary under the 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 when a CGT event occurs such as the disposal of a property. In your case, your sibling in their role as the executor of your parent's estate accidentally transferred the properties, including your property into you and your siblings' names as tenants in common. Under your parent's will it was their intention that each of their children was bequeathed a nominated property. Based on the information provided, we accept that your sibling had accidentally transferred the properties into you and your siblings' names prior to 20 September 1985, incorrectly and they rectified this error after 20 September 1985, when the relevant properties were subsequently transferred to the correct child in accordance with your parent's will. We have determined that your acquisition date of your property is your parent's date of death. Therefore, as you acquired your property prior to 20 September 1985, any capital gain or capital loss made on the disposal of your property is disregarded.