Taxation Determination

TD 92/174A1 - Addendum

Income tax: capital gains: how does subsection 160ZZQ(9) interact with subsection 160ZZQ(11)?

• Please note that the PDF version is the authorised version of this ruling.
  View the consolidated version for this notice.

Addendum

This Addendum amends Taxation Determination TD 92/174 to reflect the rewritten capital gains tax provisions in Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997.

TD 92/174 is amended as follows:

1. Title

Omit the title; substitute:

Income tax: capital gains: how does subsection 118-170(1) of the Income Tax Assessment Act 1997 interact with section 118-145 of that Act?

2. Paragraph 1

(a)

Insert 'chosen or' after 'dwelling'.

(b)

Omit 'subsection 160ZZQ(9)'; substitute 'subsection 118-170(1) of the ITAA 1997^[1]'.

(c)

Omit 'sole or principal'; substitute 'main'.

(d)

Omit 'subsection 160ZZQ(11)'; substitute 'section 118-145'.

3. Example

Omit the example; substitute:

Example

2. A husband and wife own a pre-CGT house which they both occupy. Due to a change in employment, the husband moves to another town and they acquire another (post-CGT) house on 1 July 2000. The husband occupies this house for 2 years during the course of his employment contract. On 1 July 2002, he returns to the pre-CGT house which he then continues to occupy with his wife. The post-CGT house is sold within six years of the husband ceasing to occupy it.

3. To obtain a full main residence exemption on disposal of the post-CGT house, the husband must make a choice under section 118-145 to treat that house as his main residence for the period 1 July 2002 until disposal. The husband and wife can then choose to treat the post-CGT house as their main residence under paragraph 118-170(1)(a) for the entire period that they owned it.

4. If the husband does not make the choice under section 118-145, neither would be entitled to an exemption for the period after the husband ceased to occupy the post-CGT house.

4. Subject References

Omit 'Principal residence exemption'; substitute 'CGT main residence exemption'.

5. Legislative References

Omit the legislative references; substitute:

ITAA 1997; ITAA 1997 118-170(1); ITAA 1997 118-170(1)(a); ITAA 1997 118-145

This Addendum applies from 14 September 2006, the date of effect of the repeal of the former capital gains tax provisions in Part IIIA of the Income Tax Assessment Act 1936 by Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006.

Commissioner of Taxation
10 March 2010

References

ATO references:
NO 2006/20258