For certain compulsory acquisitions, an optional rollover may apply to a particular arrangement to which the exemption for part of a main residence also applies. The rollover may apply to that arrangement to the extent that the compulsory acquisition exemption does not apply.
A compulsory acquisition of part of your main residence may not qualify for the rollover as the requirement that you acquire a replacement asset that is used for the same (or a similar) purpose may not be able to be met. For example if vacant land adjacent to your home is compulsorily acquired you may not be able to acquire replacement adjacent land.
In this case, the main residence exemption may apply to the compulsory acquisition (or similar arrangement) of part of your main residence such as vacant land or structures.
For more information, see Main residence – compulsory acquisition.
Time of the CGT event
You need to know the time of a CGT event to work out in which income year a capital gain or capital loss affects your income tax.
If an asset is lost or destroyed and you receive compensation, the time of the CGT event is when you first receive the compensation.
If you do not receive any compensation, the time of the CGT event is when the loss is discovered or the destruction occurred.
If your asset was compulsorily acquired by an entity under an Australian law or foreign law, the time of the CGT event is the earlier of when:
- you first received compensation from the entity
- the entity enters the asset (for example, land) or takes possession of it.
If an entity acquires your asset following negotiation (rather than compulsorily acquiring it), the time of the CGT event is:
- the date the contract to acquire it is made, or
- the date of the change of ownership if there is no contract.
If a lease that had been granted to you by an Australian government agency expires and is not renewed, the time of the CGT event is when the lease expires.