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Edited version of your private ruling

Authorisation Number: 1012558259680

Ruling

Subject: main residence exemption

Question 1

Are you eligible for the main residence exemption on any capital gain made on the disposal of the property?

Answer: Yes

This ruling applies for the following period(s)

Year ending 30 June 2014

The scheme commences on

1 July 2013

Relevant facts and circumstances

You acquired a property, with a dwelling.

The contract date and settlement date for the acquisition was in the 2012-13 financial year.

The dwelling is you main residence. This is the address used for;

The property has not been used to earn any income.

The area of the property is less than two hectares.

You intend on selling the property.

Relevant legislative provisions

Income Tax Assessment Act 1997 Subdivision 118-B

Reasons for decision

Detailed reasoning

Capital gains tax

A capital gain or capital loss is the difference between what it cost you to get an asset and what you received when you disposed of it.

You pay tax on your capital gains. It forms part of your income tax and is not considered a separate tax, although it is generally referred to as capital gains tax (CGT).

Selling assets such as real estate or shares is the most common way you make a capital gain or capital loss.

Some of your main personal assets are exempt from CGT, including your home, car, and most personal use assets, such as furniture.

Main residence exemption

Subdivision 118-B of the Income Tax Assessment Act 1997 (ITAA 1997) deals with the main residence exemption. It provides that generally, if you are an individual (not a company or trust), you can ignore a capital gain or capital loss from a CGT event that happens to your ownership interest in a dwelling that is your main residence (also referred to as 'your home').

To get the full exemption from CGT:

What is a dwelling?

A dwelling is anything that is used wholly or mainly for residential accommodation. Examples of a dwelling are:

Is the dwelling your main residence?

The following factors may be relevant in working out whether a dwelling is your main residence:

Application to your circumstances

Based on the information provided the property satisfies the conditions necessary to be eligible for the main residence exemption, accordingly, there will be no capital gains tax implications on the disposal of the property.

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