Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 118 - Exemptions  

Subdivision 118-B - Main residence  

Special disability trusts

SECTION 118-225   Amount of exemption available after the principal beneficiary ' s death - general  
Full exemption for trustee unless sells asset for proceeds etc.

118-225(1)    
A *capital gain or *capital loss you make from a *CGT event is disregarded if:

(a) section 118-220 applies to you in relation to the CGT event; and

(b) as a result of the CGT event, an entity *acquires the *CGT asset:

(i) as trustee of an implied trust arising because of the deceased ' s death; or

(ii) as a beneficiary of the relevant trust referred to in paragraph 118-220(e) .

Exemption for beneficiary, or trustee selling asset for proceeds etc.

118-225(2)    
If:

(a) section 118-220 applies to you in relation to a *CGT event, but paragraph (1)(b) does not; or

(b) section 118-222 applies to you in relation to a CGT event;

the amount of the *capital gain or *capital loss that you would have made apart from this section from the CGT event is decreased by an amount that is reasonable.

118-225(3)    
In determining what is a reasonable decrease:

(a) if section 118-220 applies to you, but paragraph (1)(b) does not - treat yourself as being an individual who owned the *CGT asset as the trustee of the deceased ' s estate; and

(b) if section 118-222 applies to you - treat yourself as being an individual and treat the CGT asset or your *ownership interest in it as having *passed to you as a beneficiary in the deceased ' s estate; and

(c) have regard to the principles in this Subdivision, and to:

(i) the extent that the applicable *dwelling was the deceased ' s main residence for the relevant period; and

(ii) the extent that the dwelling was used for the *purpose of producing assessable income during the relevant period.

118-225(4)    
For the purposes of subparagraph (3)(c)(i), assume the *dwelling was not the deceased ' s main residence on each day the trust referred to in paragraph 118-220(b) was not a *special disability trust.

118-225(5)    

However, subsection (2) does not apply if, just before the deceased ' s death, the deceased was an *excluded foreign resident.