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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FOI status:may be releasedFOI number: I 1019532
|CGT Cell Determinations do not have the force of law, but can be relied upon as being the considered view of the ATO. Unless otherwise stated, the view expressed may be applied to transactions entered into both before and after the date of issue of the Determination.|
- A bare trust exists where a trustee legally owns an asset, but the beneficiary is absolutely entitled to the asset as against the trustee. In such a case, the beneficiary is regarded as the owner of the asset for the purposes of the CGT provoisions.
- The principal residence exemption may be available to the trustee of the trust estate of a deceased person (subsection 160ZZQ(15)).
Example: Due to injuries sustained in an accident, a person is placed under a legal disability. As a result, legal ownership of his or her sole or principal residence passes to a trustee.Where the former legal owner (now beneficiary) is absolutely entitled to the asset as against the trustee, the principal residence exemption would continue to be available for the period that the beneficiary uses the dwelling as his or her sole or principal residence.
Commissioner of Taxation
21 May 1992
NO CGT Cell PRE
Principal residence exemption