| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1011720658923
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 - disposal of intended main residence
Question:
Is the capital gain made on the disposal of your unit disregarded?
Answer:
No.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts
Prior to 19 September 1999 you entered into a Contract of Sale for the purchase of a unit.
At the time of acquisition of the unit you were residing with your parent.
At the time of acquisition it was your intention to move into the unit as soon as practicable after settlement.
Your parent's health deteriorated due to a number of medical conditions and other limitations they were not able to care for themselves.
You did not move into the unit as you continued to reside with your parent to care for them.
You received a carer's pension.
Late last year you disposed of the unit.
You made a capital gain on the disposal of the unit.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 102-20.
Income Tax Assessment Act 1997 Section 104-10.
Income Tax Assessment Act 1997 Section 118-135.
Income Tax Assessment Act 1997 Section 115-100.
Income Tax Assessment Act 1997 Section 118-110.
Reasons for decision
The most common capital gains tax (CGT) event happens if you dispose of an asset to someone else, for example, if you dispose of a unit. The disposal constitutes a CGT event A1.
The time of the event is when you entered into the contract for its disposal, or if there is no contract, when you stop being the asset's owner.
CGT event A1 occurred upon the disposal of the unit late last year.
As general rule, you can disregard any capital gain or capital loss realised on the disposal of a dwelling (unit) that was your main residence.
To get the full exemption from CGT:
· the dwelling must have been your home for the whole period you owned it;
· the dwelling must not have been used to produce assessable income; or
· any land on which the dwelling is situated must be two hectares or less.
Whilst we appreciate your personal circumstances, there are no provisions within the legislation that allows the Commissioner the discretion to disregard a capital gain made on the disposal of the unit as you never moved into it and established it as your main residence.
As you have owned the unit for more than 12 months, and you acquired it prior to 19 September 1999, you can choose either the indexation method or the CGT discount method to calculate your net capital gain. Please refer to the enclosed information, this information has been taken from the Guide to capital gains tax 2009-10 (NAT 4151-6.2009). Information is also available on our website.