Taxation Determination

TD 92/147A - Addendum

Income tax: capital gains: how soon after erection must a dwelling become the sole or principal residence of a taxpayer to satisfy the conditions in subsection 160ZZQ(5)?

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ADDENDUM

This Addendum amends Taxation Determination TD 92/147 to reflect the rewritten capital gains tax provisions in Part 3-1 of the Income Tax Assessment Act 1997.

TD 92/147 is amended as follows:

1. Title

Omit the title; substitute:

Income tax: capital gains: how soon after the construction of a dwelling is finished must the dwelling become the main residence of a taxpayer to satisfy the conditions in paragraph 118-150(3)(a) of the Income Tax Assessment Act 1997?

2. Paragraph 1

Omit the paragraph; substitute:

1. One of the conditions for making a choice under subsection 118-150(2) of the Income Tax Assessment Act 1997 (ITAA 1997)^[1] is that the dwelling must become the main residence of a taxpayer as soon as practicable after the construction of the dwelling is finished (see paragraph 118-150(3)(a)).

3. Paragraph 2

Omit 'a dwelling is erected or completed'; substitute 'the construction of a dwelling is finished'.

4. Paragraph 3

(a)

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

(b)

Omit 'erection or completion'; substitute 'the construction of the dwelling is finished'.

5. Example 1

(a)

Number the paragraphs as 4 and 5.

(b)

Omit 'sole or principal' substitute 'main'.

(c)

Omit '1991 '.

(d)

Omit 'its erection or completion'; substitute 'the construction of the dwelling is finished'.

6. Example 2

Omit the paragraphs; substitute:

6.

The construction of Tom's dwelling is due to finish on 1 June. On 1 May, Tom decides to travel overseas for a period of 6 months. He leaves on 15 May. Although the construction of the dwelling is finished on 1 June, Tom does not move into the dwelling until his return to Australia in November.

7.

In these circumstances, a choice that section 118-150 apply to the dwelling cannot be made as the dwelling has not become Tom's main residence as soon as practicable after the construction of the dwelling is finished.

7. Example 3

Omit the paragraphs; substitute:

8.

The construction of Mary's dwelling is due to finish on 1 March. On 11 February, Mary is directed by her employer to go overseas on an assignment for 4 months, leaving on 25 February. The construction of Mary's dwelling is finished on 1 March. Mary moves into the dwelling on her return to Australia in mid June.

9.

As she is required by her employer to go overseas, Mary is taken to have moved into the dwelling as soon as practicable after the construction of the dwelling is finished.

8. Subject references

Omit the references; insert:

CGT exemption, CGT main residence exemption

9. Legislative references

Omit the reference; insert:

ITAA 1997; ITAA 1997 118-150; ITAA 1997 118-150(2); ITAA 1997 118-150(3)(a)

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
12 May 2010

References

ATO references:
NO 2006/20258

Related Rulings/Determinations:

TD 92/147