Income Tax Assessment Act 1997

A *capital gain or *capital loss you make from a *CGT event is disregarded if:

section 118‑220 applies to you in relation to the CGT event; and

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

as trustee of an implied trust arising because of the deceased’s death; or

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

If:

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

section 118‑222 applies to you in relation to a CGT event;

In determining what is a reasonable decrease:

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

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

have regard to the principles in this Subdivision, and to:

the extent that the applicable *dwelling was the deceased’s main residence for the relevant period; and

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

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.

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