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A taxpayer who makes a choice to apply the exemption during the transitional period must do so:
- by the day they lodge their income tax return for the income year that includes the commencement day, or
- within further time allowed by the Commissioner.
The way a taxpayer prepares their tax return for the applicable income year is sufficient evidence of them making a choice.
However, this does not preclude a taxpayer from making a choice or providing evidence of a choice in a way other than the way they prepare their income tax return for the applicable income year.
For example, lodging an objection to an assessment in the transitional period would also be sufficient evidence of them making a choice if the basis of the objection were to apply the main residence exemption to CGT events happening in the transitional period.
The time limit for amending assessments is also extended in cases where a taxpayer wishes to take advantage of the exemption, but their amendment period has expired. The extension to the time limit for amendments will apply where:
- the assessment was made before the commencement day
- the amendment is made within the period ending two years after 29 June 2011, and
- the amendment is made to take advantage of the exemption for CGT events that happen during the transitional period.
This means that if a compulsory acquisition occurs in the transitional period and the taxpayer's amendment period has expired for the income year in which the relevant compulsory acquisition occurred, there is a two year time limit from 29 June 2011 in which the taxpayer can seek an amended assessment.
The Commissioner may amend an assessment for the purpose of giving effect to the exemption after the end of the two year period where the taxpayer has requested the amendment before the end of the two year period.
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