Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 128 - Effect of death  

Special rules for joint tenants  

SECTION 128-50   Joint tenants  

128-50(1)    
This section has rules that are relevant if a *CGT asset is owned by joint tenants and one of them dies.

128-50(2)    
The survivor is taken to have *acquired (on the day the individual died) the individual's interest in the asset. If there are 2 or more survivors, they are taken to have acquired that interest in equal shares.

Note:

Joint tenants are treated as owning a CGT asset in equal shares: see section 108-7 .

128-50(3)    
If the individual who died *acquired his or her interest in the asset on or after 20 September 1985, the first element of the *cost base of the interest each survivor is taken to have acquired is:

Cost base of the interest of the individual who died     (worked out on the day the individual died)     Number of survivors

The first element of the *reduced cost base of the interest each survivor is taken to have *acquired is worked out similarly.

Example:

In 1999 2 individuals buy land for $50,000 as joint tenants. Each one is taken to have a 50% interest in it. On 1 May 2001 one of them dies.

The survivor is taken to have acquired the interest of the individual who died on 1 May 2001. If the cost base of that interest on that day is $27,000, the survivor is taken to have acquired that interest for that amount.

128-50(4)    

If the individual who died *acquired his or her interest in the asset before 20 September 1985, the first element of the *cost base and *reduced cost base of the interest each survivor is taken to have acquired is:

*Market value of the interest of the individual who died       (worked out on the day the individual died)       Number of survivors

Note:

There is a special indexation rule for surviving joint tenants: see section 114-10 .