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Edited version of private ruling
Authorisation Number: 1011494479483
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Ruling
Subject: Capital gains tax - main residence
Question:
Has property A been your main residence for all of your period of ownership?
Answer:
Yes.
This ruling applies for the following periods:
Year ended 30 June 2010
Year ended 30 June 2011
The scheme commences on:
1 July 2009
Relevant facts and circumstances
Some time after 20 September 1985 you purchased a property (property A).
You are the sole owner of this property and do not own any other properties.
You occupied the home immediately on purchasing the property.
Prior to this purchase you shared your time between living with your relative and spending time at property B with your spouse.
When your relative passed away you remained in your relative's property for some months prior to purchasing the property A.
Your spouse owns property B and your spouse continues to hold and operate property B as it is the main source of income.
You have stated that you would like to nominate your property A as your main residence for the full period of ownership.
Since purchasing property A you have divided your time between property B and property A.
You estimate that X% to Y% of your time is spent at property A.
Property A is only used for private and domestic purposes and never been used to produce assessable income.
You have stated that the personal effects held at property A are consistent with items held in any home.
You have stated that the personal effects held at property B are consistent with the items held at property A.
There is no requirement by you to pack any items when you travel between property A and property B.
You use a number of mailing addresses the first being property A which is used for utilities, the second property B which is used as a legacy address and third, your accountants address which is used for all matters associated with your financial affairs.
The address shown on the electoral roll for you is property B.
The address shown on your recent income tax returns is property B.
The address shown on your drivers licence is property B.
You motor vehicle is garaged at both property A and property B.
You motor vehicle insurance states that your car is garaged at property B.
You have stated that it is your intention to purchase another property in the same area as property A upon its sale.
You have stated that your future plans are for you and your spouse to both spend all your time in the region of property A.
You have stated that if property A is classified as your main residence then your spouse will elect that property A is the main residence for the period that you both had separate main residences.
Relevant legislative provisions
Income Tax Assessment Act 1997 118-110.
Reasons for decision
A capital gain or capital loss you make from a capital gains tax (CGT) event that happens to your main residence is disregarded if you are an individual and the dwelling was your main residence throughout your ownership period.
Establishment of a main residence
Whether a dwelling is a taxpayer's sole or principle residence is an issue which depends on the facts in each case.
The relevance and weight to be given to each of these or other factors and will depend upon the circumstances of each particular case.
These factors may include, but are not limited to:
(i) the length of time the taxpayer has lived in the dwelling
(ii) the place of residence of the taxpayers family
(iii) whether the taxpayer has moved his or her personal belongings into the dwelling
(iv) the address to which the taxpayer has his or her mail delivered
(v) the taxpayers address on the Electoral Roll
(vi) the connection of services such as telephone, gas and electricity
(vii) the taxpayers intention in occupying the dwelling
Your circumstances
Some time after 20 September 1985 you purchased property A. You moved in as soon as was practical and also moved your personal items into the residence.
Prior to purchasing property A you shared your time between living with your relative in the region of property A and spending time at property B with your spouse.
You have continued to have your mail directed to property B and did not change the address on the electoral role as this is more convenient as a default address. Correspondence would always be collected at the property B address on a two to three week basis. Therefore due to this regularity there was no need to change the address.
In comparing the factors in establishing a main residence in your circumstances, it is considered that while some of your actions are not consistent, you did however:
- move into the property A as soon as was practical
- move you personal items into the property
- you generally live in property A X% to Y% of your time
- all services are connected to property A
- all your children live close by property A
- the majority of your friends, social contacts and engagements are close by property A
- your future plans are for you and your spouse to both spend all your time in the region of property A
- property A is only used for private and domestic purposes and never been used to produce assessable income.
After reviewing your circumstances, on the balance it is considered that you had established property A as your main residence after its purchase. Therefore, the full main residence exemption will apply and any capital gain from the sale of property A will be fully disregarded.
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