Private ruling: CGT - deceased estate
Date of advice: 3 November 2025
Published: 22 December 2025
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 2020

Ruling: Q1: Will Section 118-160 of the Income Tax Assessment Act 1997 apply to disregard any Capital gains tax (CGT) payable up to 2 hectares on the sale of the property? | A1: Yes. Based on the information provided to the Commissioner any CGT that arises on the sale of the property will be exempt under the main residence provision and section 118-160 of the Income Tax Assessment Act 1997 . The dwelling was accidently destroyed, and the deceased treated no other property as their main residence. Up to 2 hectares is exempt from CGT when it is sold.

Relevant facts and circumstances: The deceased passed away in a prior year. The deceased's main residence was the property which they inherited from their late spouse. The deceased treated the property as their main residence for the whole of their ownership period. A number of years ago the deceased moved out of the property and moved in with their late child, which they were a joint tenant of, and they did not treat this property as their main residence. The deceased lived with their child until they moved into an Aged Care facility. In the same year that the deceased moved into the Aged Care facility the house on the property was destroyed by fire. The fire was accidental and not suspicious. The deceased was a hoarder, and rats may have chewed through electrical wires. An insurance payout for the house was received by the deceased and no insurance payout was received for the contents as the property was unoccupied. The house was not rebuilt on the land. The only income received from the property was rental. Rent was received for several years. The Estate will be selling the property to distribute the proceeds to the beneficiaries of the Estate.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-160