Taxation Determination
TD 92/129
Income tax: capital gains: if a person builds a principal residence straddling two post-CGT blocks acquired at different times, what is the 'relevant commencing date' for the purpose of subsection 160ZZQ(5AA) of the Income Tax Assessment Act (1936) ?
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FOI status:
may be releasedFOI number: I 1212982| This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, the Determination applies to transactions entered into both before and after its date of issue. |
1. The 'relevant commencing date' is the date the earlier block was acquired.
Example:
Block A was purchased 1 October 1985. Block B, the neighbouring block, was purchased 1 October 1990. On 1 January 1991 construction commenced on a dwelling which straddled both blocks. On 1 July 1991, the taxpayer moved into this dwelling as his or her sole or principal residence, and continued to reside there until 1 December 1991 when the dwelling was disposed of. At no time was the dwelling used for income-producing purposes.
If the taxpayer elects for subsection 160ZZQ(5) to apply, the 'relevant commencing date' for subsection 160ZZQ(5AA) is 1 October 1985. As the period from this date until the dwelling was completed is more than four years before the dwelling became the sole or principal residence, sub-subparagraph 160ZZQ(5)(e)(i)(B) applies to treat the dwelling as the taxpayer's sole or principal residence only from 1 July 1987 until 30 June 1991.
Note : As the 'relevant period' (subsection 160ZZQ(1)) also commenced on 1 October 1985, the taxpayer is not entitled to a full principal residence exemption. The full period of ownership (1 October 1985 - 1 December 1991) is a period of 2,253 days. The dwelling was the taxpayer's sole or principal place of residence from 1 July 1987 - 30 June 1991 [deemed] and from 1 July 1991 - 1 December 1991 [actual] (a total of 1,615 days). The dwelling was not the taxpayer's sole or principal residence for 638 (2,253 - 1,615) days. In accordance with subsection 160ZZQ(16), approximately 28 per cent (638/2,253) of any capital gain or loss on disposal of the dwelling would not be exempt.
Commissioner of Taxation
23/07/92
References
ATO references:
NO CGT Cell PRE
ISSN 1038 - 3158
Subject References:
capital gains;
principal residence exemption;
relevant period;
relevant commencing date
Legislative References:
ITAA 160ZZQ(1);
ITAA 160ZZQ(5);
ITAA 160ZZQ(5)(e)(i);
ITAA 160ZZQ(5AA);
ITAA 160ZZQ(16)
| Date: | Version: | Change: | |
| You are here | 23 July 1992 | Original ruling | |
| 29 November 2006 | Original ruling + note | Repeal provision note | |
| 24 March 2010 | Consolidated ruling | Addendum |