Private ruling: Capital gains tax
Date of advice: 7 September 2017
Published: January 2018
Ruling period: Financial year ending 30 June 201Y
Date scheme commenced: 1 July 201X

Ruling: Q1: Were the beneficiaries of the deceased estate “absolutely entitled” to the property as against the trustee of the deceased estate? | A1: No. No beneficiary of the estate was absolutely entitled to the property as against the trustee of the deceased estate as the administration of the estate was not complete (Taxation Ruling TR 2004/D5, paragraph 72). As the property was sold in the estate, the trustee of the deceased estate is responsible for any resulting capital gain on the sale of the property. | Q2: Will the capital gain the trustee made upon disposal of the property be disregarded under paragraph 104-10(5)(a) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A2: Yes. The trustee is taken to have acquired the property on the date of death of the testator, being mid 19XY. As this was prior to 20 September 1985, any capital gain made by the trustee will be disregarded (paragraph 104-10(5)(a) of the ITAA).

Relevant facts and circumstances: The deceased passed away prior to 20 September 1985. The deceased was survived by their children. One of the assets of the deceased’s estate was a property. The property was transferred to the executors prior to 20 September 1985. The executors did not sell the property and continued to hold it. The property was sold by the executors in the 201Y financial year.

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