| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private ruling
Authorisation Number: 1011665237606
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject: Capital gains tax (CGT) - Main residence
Will the absence rule apply to a property that was your main residence and has been used to produce assessable income for a period up to six years?
Yes.
This ruling applies for the following period
Year ended 30 June 2009
The scheme commenced on
1 July 2008
Relevant facts
You and your spouse purchased a residential property (property A) as your main residence after September 1985. The property was situated on less than two hectares of land.
The property remained your main residence until it was rented out.
While the property was being rented out you and your spouse moved to rental accommodation.
You continued to treat the dwelling as your main residence after you vacated.
You and your spouse purchased a new property (property B) and moved into this property.
You have elected to treat the property A as your main residence for six years from the date it became a rental property.
Reasons for decision
Main residence exemption
Section 118-110 of the ITAA 1997 advises that you can fully disregard a capital gain or capital loss made from a CGT event that happens to your main residence. To qualify for this full exemption, the dwelling must have been your main residence for the whole period you owned it from acquisition until disposal, and must not have been used to produce assessable income.
Absences
Section 118-145 of the ITAA 1997 allows you to continue to treat your main residence even if you stop living in it. If you leave the property and use it to produce assessable income, the maximum period that you can continue to treat it as your main residence is six years after you stop living in it. If you make this choice, you cannot treat any other dwelling as your main residence during the same period.
In your case, the absence rule would be applicable for property A for a period of six years from the date it became a rental property.