INCOME TAX ASSESSMENT ACT 1997 - SECT 118.225 Amount of exemption available after the principal beneficiary's death--general

INCOME TAX ASSESSMENT ACT 1997 - SECT 118.225

Full exemption for trustee unless sells asset for proceeds etc.

  (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.

  (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.

  (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.

  (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.

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