Draft Taxation Determination – Application of Division 128 of the Income Tax Assessment Act 1997 (Cth)
5 September 2025
On 25 August 2025, the Law Council provided a submission to the Australian Taxation Office (ATO)’s consultation on a draft tax determination setting out the Commissioner of Taxation’s views on the application of the capital gains tax (CGT) rollover in Division 128 of the Income Tax Assessment Act 1997 (Cth) (ITAA) when there is a chain of deaths.
Our submission was informed by input from the Law Institute of Victoria, Law Society of New South Wales, New South Wales Bar Association and Queensland Law Society, as well as guidance from the Law Council’s National Elder Law and Succession Law Committee and the Business Law Section’s Taxation Committee. We are grateful for the constructive engagement of our members.
The Law Council commends the ATO’s efforts in giving clarity to a difficult area, as the application of the CGT provisions in the ITAA can cause significant complexity in estate administration, particularly where a beneficiary dies before receiving their entitlements from another estate.
The Law Council submission has sought to ensure that the draft tax determination reflects the practical and legal complexities of estate administration across jurisdictions. These include the draft tax determination’s interpretation of ownership, probate requirements and the application of Division 128 of the ITAA having significant implications for estate administration and CGT concessions. We highlight jurisdictional variations, practical challenges and inequities created by the draft tax determination’s current wording and provide recommendations for amendment to ensure fairness, clarity and consistency.
The Law Council would welcome further engagement in the development of the draft tax determination.
Last Updated on 03/09/2025
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