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  

Dwellings acquired from deceased estates

SECTION 118-195   Dwelling acquired from a deceased estate  

118-195(1)    

A *capital gain or *capital loss you make from a *CGT event that happens in relation to a *dwelling or your *ownership interest in it is disregarded if:

(a) you are an individual and the interest *passed to you as a beneficiary in a deceased estate, or you owned it as the trustee of a deceased estate; and

(b) at least one of the items in column 2 and at least one of the items in column 3 of the table are satisfied; and

Beneficiary or trustee of deceased estate acquiring interest
Item	One of these items is satisfied	And also one of these items
1	the deceased *acquired the *ownership interest on or after 20 September 1985 and the *dwelling was the deceased's main residence just before the deceased's death and was not then being used for the *purpose of producing assessable income	your *ownership interest ends within 2 years of the deceased's death, or within a longer period allowed by the Commissioner
.
2	the deceased *acquired the *ownership interest before 20 September 1985	the *dwelling was, from the deceased's death until your *ownership interest ends, the main residence of one or more of:
		(a)	the spouse of the deceased immediately before the death (except a spouse who was living permanently separately and apart from the deceased); or
		(b)	an individual who had a right to occupy the dwelling under the deceased's will; or
		(c)	if the *CGT event was brought about by the individual to whom the *ownership interest *passed as a beneficiary - that individual

(c) the deceased was not an *excluded foreign resident just before the deceased ' s death.

Note 1:

You may make a capital gain or capital loss if the dwelling was used for the purpose of producing assessable income: see section 118-190 .

Note 2:

In some cases the use of a dwelling to produce assessable income can be disregarded: see sections 118-145 and 118-190 .

Note 3:

There are special rules for dwellings acquired before 7.30 pm on 20 August 1996. These rules also affect the operation of section 118-192 and subsections 118-190(4) and 118-200(4) : see section 118-195 of the Income Tax (Transitional Provisions) Act 1997 .

118-195(1A)    

For the purposes of a provision of this Subdivision that applies the table in subsection (1):

(a) disregard paragraphs (a) and (b) in column 3 of item 2 of the table if, just before the deceased ' s death, the deceased was an *excluded foreign resident; and

(b) disregard paragraph (c) in column 3 of item 2 of the table if, at the time the relevant *CGT event happened, the individual was an excluded foreign resident.

Note:

The other provisions that apply the table include paragraph 118-192(3)(b) , subsection 118-200(2) , paragraph 118-225(3)(c) and section 118-260 .

118-195(2)    
Only these *CGT events are relevant:

(a) CGT events A1, B1, C1, C2, E1, E2, F2, K3, K4 and K6 (except one involving the forfeiting of a deposit); and

(b) a CGT event that involves the forfeiting of a deposit as part of an uninterrupted sequence of transactions ending in one of the events specified in paragraph (a) subsequently happening.

Note:

The full list of CGT events is in section 104-5 .