← back to search

Loading document…

TD 1999/70 — Income tax: capital gains: if a dwelling passes to you as a beneficiary or the trustee of a deceased estate and you make a capital gain or capital loss from a CGT event that happens to the dwelling, can you disregard the gain or loss despite your having used the dwelling since the deceased's death for income producing purposes if:[bull ] the deceased acquired the dwelling on or after 20 September 1985; [bull ] the dwelling was the deceased's main residence just before their death and was not then being used for income producing purposes; and [bull ] your ownership interest in the dwelling ends within 2 years of the deceased's death? · Tullian

← back to search compare ↔

TD 1999/70current

Income tax: capital gains: if a dwelling passes to you as a beneficiary or the trustee of a deceased estate and you make a capital gain or capital loss from a CGT event that happens to the dwelling, can you disregard the gain or loss despite your having used the dwelling since the deceased's death for income producing purposes if:[bull ] the deceased acquired the dwelling on or after 20 September 1985; [bull ] the dwelling was the deceased's main residence just before their death and was not then being used for income producing purposes; and [bull ] your ownership interest in the dwelling ends within 2 years of the deceased's death?

Income tax: capital gains: if a dwelling passes to you as a beneficiary or the trustee of a deceased estate and you make a capital gain or capital loss from a CGT event that happens to the dwelling, can you disregard the gain or loss despite your having used the dwelling since the deceased's death for income producing purposes if: • the deceased acquired the dwelling on or after 20 September 1985; • the dwelling was the deceased's main residence just before their death and was not then being used for income producing purposes; and • your ownership interest in the dwelling ends within 2 years of the deceased's death?

Yes.

Paragraphs 118-195(1)(a) and 118-195(1)(b) of the Income Tax Assessment Act 1997 provide that if a dwelling passes to you as a beneficiary or as a trustee of a deceased estate and you make a capital gain or capital loss from a CGT event that later happens to the dwelling, you can disregard the gain or loss if: (a) the deceased acquired the dwelling on or after 20 September 1985; (b) the dwelling was the deceased's main residence just before their death and was not then being used for income producing purposes; and (c) your ownership interest in the dwelling ends within 2 years of the deceased's death

Section 118-190, which applies to increase a capital gain or capital loss from the happening of a CGT event to a dwelling used as your main residence if you used it for purposes of producing assessable income, does not alter the position stated in paragraph 2. Section 118-190 does not operate in that situation to increase the capital gain or capital loss which subsection 118-195(1) disregards.

This outcome (namely, that any capital gain or capital loss from a CGT event which later happens to the dwelling is disregarded) applies whether or not the dwelling has been used for income producing purposes within 2 years of the deceased's death.

Section 118-190 operates to increase the capital gain or capital loss which subsection 118-195(1) otherwise disregards if, among other circumstances, the beneficiary or the trustee used the dwelling for more than 2 years after the deceased's death both for income producing purposes and as their main residence.

Subsection 118-190(4) provides that if the dwelling was the main residence of the deceased just before their death and it was not then being used for any income producing purpose, any use of the dwelling by the deceased person for income producing purposes before their death is ignored.