Private ruling: Capital Gains Tax - Deceased Estate
Date of advice: 26 February 2026
Published: 20 April 2026
Ruling period: Year ending DD/MM/20YY
Date scheme commenced: DD/MM/20YY

Ruling: Q1: Can you disregard any capital gain made on the disposal of the property? | A1: Yes. Section 128-15 of the Income Tax Assessment Act 1997 (ITAA 1997) sets out what happens if a CGT asset owned by a deceased person immediately before their death devolves to their legal personal representative or passes to a beneficiary of the deceased estate. Relevantly, subsection 128-15(2) provides that the legal personal representative or beneficiary is taken to have acquired the asset on the date of the deceased's death. Therefore, XXX, as Legal Personal Representative, are taken are taken to have acquired the property at date of death of the deceased, which was DD/MM/19YY. Subsection 104-10(1) provides that CGT event A1 happens if you dispose of a CGT asset. However, any capital gain or capital loss you make on disposal of a CGT asset acquired prior to 20 September 1985 is disregarded pursuant to paragraph 104-10(5)(a).

Relevant facts and circumstances: On DD/MM/19YY, the deceased passed away, leaving a will. The will appointed Person A as executor and trustee. The equal beneficiaries were Person A and Person B. At time of death, the deceased owned a property at XXX, which was their main residence, and they acquired on DD/MM/19YY. The property has not been used to produce assessable income and is less than 2 hectares. Person A was residing with the deceased at their time of death and continued to live in the property. On DD/MM/19YY, probate was granted to Person A. Person A took no further steps to administer the deceased estate and never transferred the property title to either of the beneficiaries. On DD/MM/20YY, Person A passed away. In MM/20YY, Person A's estate was referred to Company A. Person A died intestate, and the whereabouts of next of kin are unknown. The property remained vacant after Person A's death. On DD/MM/20YY, Company A obtained a Grant of Letters of Administration to administer Person A's estate. Person A was still residing at the property at time of death, and Company A then became aware of the fact that Person A had never fully administered the deceased's estate. After obtaining Letters of Administration for Person A's estate, Company A were then able to proceed with an application for a Grant of Letters of Administration with the will annexed of the unadministered estate of the deceased. On DD/MM/20YY, Company A were granted Letters of Administration for the unadministered estate of the deceased. At this point, Company A started to clear the property to prepare for sale. On DD/MM/20YY, Company A made an application to the Registrar of Titles for the formal conversion of the General Law title to Torrens title. Although a Torrens title was created by the Titles Office in MM/20YY, an application to confirm the interests in the General Law title was still required. On DD/MM/20YY, Company A engaged a real estate agent and requested a property valuation. The real estate agent advised that the condition of the property was such that it either required demolition or a full renovation with the retention of façade (heritage overlay). Company A did not attend to any capital improvements or renovations and listed the property in its original state. In MM/20YY, the property was listed for sale. On DD/MM/20YY, the required conversion of titles was approved by the Titles Office. On DD/MM/20YY, a contract of sale was signed. On DD/MM/20YY, settlement occurred.

Relevant legislative provisions: Income Tax Assessment Act 1997 Paragraph 104-10(5)(a). | Income Tax Assessment Act 1997 Subsection 128-15(2).