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Edited version of your written advice
Authorisation Number: 1012836861068
Date of advice: 9 July 2015
Ruling
Subject: Capital gains tax - non-resident - main residence exemption
Question:
Are you entitled to the main residence exemption upon the sale of your Australian dwelling?
Answer:
No.
This ruling applies for the following periods:
Year ending 30 June 20ZZ
The scheme commenced on:
1 July 20YY
Relevant facts
You and your spouse are citizens and residents of an overseas country.
You and your spouse are non-residents of Australia for tax purposes
You and your spouse reside at X (overseas dwelling).
You and your spouse have resided at this address for approximately one year.
You and your spouse enter Australia under a visitor category 600 visa.
You and your spouse purchased a vacant lot of land in the 20WW income year. (Australian dwelling)
You and your spouse completed construction of a residential dwelling in the 20XX income year.
You and your spouse moved into the dwelling shortly after construction.
You and your spouse resided in the dwelling for a number of months and you then returned to the overseas dwelling.
You and your spouse will return to the Australian dwelling in the 20YY income year.
The Australian dwelling remains vacant while you are overseas as does the overseas dwelling whilst you are in Australia.
You and your spouse have one child who resides in Australia and two children who reside in the same overseas country as you both.
You and your spouse's stronger financial ties are located in the overseas country.
You and your spouse visit Australia to spend time with family members and have been visiting for the previous seven years for periods between four to six months.
You and your spouse are not members of any sporting clubs in Australia or the overseas country.
Relevant legislative provisions:
Income Tax Assessment Act Section 118-110
Reasons for decision
Your entitlement to the main residence exemption in relation to the Australian dwelling is dependent on it being your main residence during the period that you own it.
The legal concept of 'main residence' is based on an objective assessment of all of the residences that are available to a taxpayer to reside in. Where a taxpayer has more than one dwelling available to them to reside in, the analysis is used to determine which of those dwellings their main residence is.
In accordance with Taxation Determination TD 51, some relevant factors may include, but are not limited to:
• the length of time the taxpayer has lived in the dwelling
• the place of residence of the taxpayer's family
• whether the taxpayer has moved his or her personal belongings into the dwelling
• the address to which the taxpayer has his or her mail delivered
• the taxpayers address on the electoral roll
• the connection of services such as telephone, gas and electricity
• the taxpayers intention in occupying the dwelling
The relevance and weight to be given to each of these or other factors will depend on the circumstances of each particular case.
With regard to the circumstances in your case and the factors listed in TD 51, we consider that the dwelling in Australia is not your main residence and you are not eligible for an exemption from CGT.
Although you can demonstrate that some of the factors listed in TD 51 are relevant to your situation, on balance, we do not accept that the dwelling in Australia is your main residence for the following reasons:
You are considered to be a non-resident for tax purposes.
You and your spouse maintain another residence in an overseas country which you do not abandon when you visit Australia.
Your stronger and established economic ties in the overseas country are where your main residence dwelling is located.
The number of visits to the Australian dwelling and the duration of each visit is indicative that the dwelling in the overseas country is your main residence.
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