Taxation Determination
TD 92/135
Income tax: capital gains : is the principal residence exemption relevant when the proceeds of sale of a dwelling are treated as income under ordinary concepts?
This version is no longer current. Please follow this link to view the current version. |
-
Please note that the PDF version is the authorised version of this ruling.This ruling contains references to repealed provisions, some of which may have been rewritten. The ruling still has effect. Paragraph 32 in TR 2006/10 provides further guidance on the status and binding effect of public rulings where the law has been repealed or repealed and rewritten. The legislative references at the end of the ruling indicate the repealed provisions and, where applicable, the rewritten provisions.This document has changed over time. View its history.
FOI status:
may be releasedFOI number: I 1213055| 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. No. In cases where the sale of a dwelling gives rise to income under subsection 25(1) of the Income Tax Assessment Act 1936 e.g. as part of a business or from an isolated profit-making transaction, that income remains assessable even if a principal residence exemption is available for CGT purposes.
2. The principal residence exemption is a capital gains tax exemption only and does not extend to exempt from tax ordinary profits or business income.
Example :
A builder constructs a spec home in which he and his family reside while construction proceeds on another spec home. Any profit on sale which gives rise to income is fully assessable to the builder even if a principal residence exemption is available for CGT purposes.
Commissioner of Taxation
30/07/92
References
ATO references:
NO CGT Cell PRE
Related Rulings/Determinations:
TR923
Subject References:
Principal residence exemption;
income under ordinary concepts
Legislative References:
ITAA 160ZZQ
| Date: | Version: | Change: | |
| 30 July 1992 | Original ruling | ||
| You are here | 29 November 2006 | Original ruling + note | Repeal provision note |
| 12 May 2010 | Consolidated ruling | Addendum |