However, there is another way you can get a full CGT exemption on an inherited home – and that is if a “relevant” person occupies it as their home from the time of the deceased’s death until its later sale (or other transfer or disposal, etc).
And these “eligible” persons are the deceased’s surviving spouse of the deceased, a person who is given a right to occupy it under the deceased’s will (eg, a niece or nephew or a friend) or a beneficiary who inherits the home (or an interest in it).
However, there are lots of things to bear in mind when using this rule – some good and some not so good. These include the following:
Finally, it may be even possible to use another CGT concession – namely, the “building concession” - to preserve the CGT exempt status of the home where renovations are undertaken or intended to be undertaken on the home’s acquisition.
And this may mean it may not have to occupied by a relevant person (or sold within two years of the deceased’s death) to get the CGT exemption.
However, if this concession can be used in this case, it comes with one big drawback – no other home can be taken to be your CGT main residence for the period that this building concession is used.
As always, come and seek our advice if you inherit a home and wish to occupy the home – or even beforehand for some appropriate planning.
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