(1) CGT event K3 happens if you die and a * CGT asset you owned just before dying * passes to a beneficiary in your estate who (when the asset passes):
(a) is an * exempt entity; or
(b) is the trustee of a * complying superannuation entity; or
(c) is a foreign resident.
(2) If the asset passes to a beneficiary who is a foreign resident, CGT event K3 happens only if:
(a) you were an Australian resident just before dying; and
(b) the asset (in the hands of the beneficiary) is not * taxable Australian property.
(3) The time of the event is just before you die.
(4) A capital gain is made if the * market value of the asset on the day you died is more than the asset's * cost base. A capital loss is made if that market value is less than the asset's * reduced cost base.
Note: The trustee of the estate must include in the date of death return any net capital gain for the income year when you died.
(5) A * capital gain or * capital loss is disregarded if you * acquired the asset before 20 September 1985.
Note: There is also an exception for certain philanthropic testamentary gifts: see section 118-60.