Income tax: capital gains: is a principal residence exemption available where a dwelling is owned by a family company or family trust?
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Notice of Withdrawal
1. CGT Determination Number 58 (TD 58) explains that the principal residence exemption is not available to a so-called 'family company' or 'family trust' because paragraph 160ZZQ12(a) of the Income Tax Assessment Act 1936 (ITAA 1936) requires that the dwelling be owned by a natural person.
3. TD 58 involves a straight application of the law. Subsection 118-110(1) of the Income Tax Assessment Act 1997 (ITAA 1997) makes it clear that in the general case, the main residence exemption is only available to an individual (defined in subsection 995-1(1) of the ITAA 1997 as a natural person). Subsection 960-100(4) of the ITAA 1997 goes on to provide that if a provision refers to an entity of a particular kind, it refers to the entity in its capacity as that kind of entity and not in any other capacity.
Commissioner of Taxation
10 March 2010
Principal residence exemption