Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 118 - Exemptions  

Subdivision 118-B - Main residence  

Basic case and concepts

SECTION 118-110   Basic case  

118-110(1)  
A *capital gain or *capital loss you make from a *CGT event that happens in relation to a *CGT asset that is a *dwelling or your *ownership interest in it is disregarded if:


(a) you are an individual; and


(b) the dwelling was your main residence throughout your *ownership period; and


(c) the interest did not *pass to you as a beneficiary in, and you did not *acquire it as a trustee of, the estate of a deceased person.

Note 1:

You may make a capital gain or capital loss even though you comply with this section if the dwelling was used for the purpose of producing assessable income: see section 118-190 .

Note 2:

There is a separate rule for beneficiaries and trustees of deceased estates: see section 118-195 .

Note 3:

There is a separate rule for a CGT event that is a compulsory acquisition (or similar arrangement) happening to adjacent land but not also to the dwelling itself: see section 118-245 .

118-110(2)  
Only these *CGT events are relevant:


(a) CGT events A1, B1, C1, C2, E1, E2, F2, K3, K4 and K6 (except one involving the forfeiting of a deposit); and


(b) a CGT event that involves the forfeiting of a deposit as part of an uninterrupted sequence of transactions ending in one of the events specified in paragraph (a) subsequently happening.

Note:

The full list of CGT events is in section 104-5 .

118-110(3)  


However, this section does not apply if, at the time the *CGT event happens, you:


(a) are an *excluded foreign resident; or


(b) are a foreign resident who does not satisfy the *life events test.

118-110(4)  


You are an excluded foreign resident , at a particular time, if:


(a) you are a foreign resident at that time; and


(b) the continuous period ending at that time for which you have been a foreign resident is more than 6 years.

118-110(5)  


You satisfy the life events test , at the time a *CGT event happens, if:


(a) the continuous period ending at that time for which you have been a foreign resident is 6 years or less; and


(b) you are covered by any of the following subparagraphs:


(i) you or your *spouse has had a *terminal medical condition that existed at any time during that period of foreign residency;

(ii) your *child has had a terminal medical condition that existed at any time during that period of foreign residency, and that child was under 18 years of age at at least one such time;

(iii) your spouse, or your child who was under 18 years of age at death, has died during that period of foreign residency;

(iv) the CGT event happens because of a matter referred to in a paragraph of subsection 126-5(1) involving you and your spouse (or former spouse).

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