INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 2 - Application  

SECTION 160X   DEATH NOT TO CONSTITUTE DISPOSAL ETC.  

160X(1)   [Application]  

This section has effect subject to section 160Y .

160X(2)   [Death not a disposal]  

An asset owned by a person shall not be taken, for the purposes of the application of this Part in relation to that person, to have been disposed of by that person by reason of the death of that person.

160X(3)   [Position of legal personal representative, beneficiary]  

Where an asset that formed part of the estate of a deceased person has passed to the legal personal representative of the deceased person:

(a) if the asset subsequently passes to a beneficiary in that estate - the asset shall not thereby be taken, for the purposes of this Part, to have been disposed of by the legal personal representative; but

(b) if the asset is subsequently disposed of by the beneficiary - the cost base, the indexed cost base or the reduced cost base to the beneficiary of the asset for the purposes of this Part shall include any amount that would, if the legal personal representative had disposed of the asset at the time when the asset passed to the beneficiary, have been included in the cost base, the indexed cost base or the reduced cost base, as the case may be, of the asset to the legal personal representative as a result of the legal personal representative having incurred expenditure in respect of the asset.

160X(4)   [Death before 20 September 1985]  

Where a person died before 20 September 1985, any asset that formed part of the estate of the deceased person and passed to the legal personal representative of the deceased person or to a beneficiary in the estate of the deceased person shall be deemed, for the purposes of this Part, to have been acquired by the legal personal representative or the beneficiary before that date notwithstanding that the asset was transmitted or transferred to the legal personal representative or beneficiary on or after that date.

160X(5)   [Death on or after 20 September 1985]  

Where an asset that formed part of the estate of a person who died on or after 20 September 1985 has passed to the legal personal representative of the deceased person or to a beneficiary in the estate of the deceased person:

(a) if:

(i) the deceased person acquired the asset before 20 September 1985; or

(ii) the asset is a dwelling that was, immediately before the person's death, the person's sole or principal residence for the purposes of section 160ZZQ and was not, for the purposes of that section, then being used for the purpose of gaining or producing assessable income;

the asset shall be deemed, for the purposes of this Part, to have been acquired by the legal personal representative or the beneficiary on the date of the person's death and to have been so acquired for a consideration equal to the market value of the asset at the date of the person's death; or

Note:

In certain cases, a dwelling may be taken to have been a person's sole or principal residence, and any use for the purpose of gaining or producing assessable income may be disregarded, for the purposes of section 160ZZQ: see subsection 160ZZQ(11) .

(b) in any other case - the asset shall be deemed, for the purposes of this Part, to have been acquired by the legal personal representative or the beneficiary on the date of the person's death and:

(i) for the purpose of ascertaining whether a capital gain accrued to the legal personal representative or the beneficiary in the event of a subsequent disposal of the asset by the legal personal representative or the beneficiary - to have been so acquired for a consideration equal to the amount that would have been the indexed cost base to the deceased person of the asset for the purposes of this Part if the deceased person had disposed of the asset immediately before his or her death;

(ii) for the purpose of ascertaining whether the legal personal representative or the beneficiary incurred a capital loss in the event of a subsequent disposal of the asset by the legal personal representative or the beneficiary - to have been so acquired for a consideration equal to the amount that would have been the reduced cost base to the deceased person of the asset for the purposes of this Part if the deceased person had disposed of the asset immediately before his or her death; and

(iii) in the case of an asset that was a personal-use asset of the deceased person - to be a personal-use asset of the legal personal representative or of the beneficiary, as the case may be.

160X(6)   [Disposal within 12 months of deceased's acquisition]  

If, in the case of an asset to which subparagraph (5)(b)(i) applies, the asset was disposed of by the legal personal representative or the beneficiary within 12 months after the day on which the asset was acquired by the deceased person, the reference in that subparagraph to the indexed cost base to the deceased person of the asset shall be construed as a reference to the cost base to the deceased person of the asset.