When someone who lived outside of Australia for more than six years passes away, certain tax exemptions related to their main residence might not apply to their estate. Here's what you need to know:
Deceased as Excluded Foreign Resident:
If the person was considered an excluded foreign resident at the time of their death (meaning they lived outside of Australia for more than six years continuously), the tax exemptions they had for their main residence won't be available to the trustee or beneficiaries of their estate who inherit the property.
Important Tax Warning: No Two-Year Post-Death Concession:
Usually, if a property is sold within two years of the owner's death and it was their main residence before they died, a full exemption from capital gains tax applies. However, if the deceased was an excluded foreign resident when they passed away, this concession doesn't apply anymore.
This means that neither the trustee nor the beneficiary will benefit from the full exemption. However, if the beneficiary isn't an excluded foreign resident at the time of the sale, they might still qualify for a partial exemption based on their own circumstances.
Key Point: For estates of deceased individuals who were excluded foreign residents, tax exemptions for their main residence may not apply as they would for residents.
If you have questions or need assistance navigating these tax implications, feel free to reach out to Tax Ideas Accountants & Advisers at +61 2 83181545 or schedule an appointment through our live calendar.