| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1011874453074
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 - main residence and absence choice
Question: Are the days in the period between the day you vacated the property and
30 June 2012, main residence days for the purposes of the main residence exemption?
Answer: Yes.
This ruling applies for the following period
30 June 2012
The scheme commenced on
1 July 2011
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
Some time after 1985, you and your sibling jointly acquired a property (the property).
You and your sibling established the property as your main residence.
During the 2002-03 income year you moved overseas permanently.
You are no longer an Australian resident for income tax purposes.
Your sibling continues to reside in the property.
The property has never been used for income producing purposes.
You do not own another main residence.
You will dispose of the property in the future.
You will choose to continue to treat the property as your main residence for your period of your absence.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-110.
Income Tax Assessment Act 1997 Section 118-145
Reasons for decision
While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision.
Main residence exemption
Generally, you ignore a capital gain or capital loss from a capital gains tax (CGT) even that happens to your ownership interest in a property that is your main residence.
To get the full exemption from CGT:
· the property must have been your home for the whole period you owned it
· you must not have used the property to produce assessable income, and
· the land on which the dwelling is situated must be two hectares or less.
Continuing main residence status after dwelling ceases to be your main residence
In some cases, you can choose to continue to treat a property as your main residence even though you no longer live in it. You can only make this choice for a property that you have first occupied as your main residence.
This choice needs to be made only for the income year that the CGT event happens to the property - for example, the year that you enter into a contract to dispose of it.
If you make this choice, you cannot treat any other property as your main residence for that period (except for a limited time if you are changing main residences).
If you do not use the property to produce income you can treat the property as your main residence for an unlimited period after you stop living in it.
If you use the property to produce income, you can choose to treat it as your main residence. The maximum amount of time you can continue to treat it as your main residence is six years for each time the property becomes and ceases to be your main residence.
In your case, you will choose to continue to treat the property as your main residence form when you vacated the property, as the property has not been income producing all the days between the day you vacated the property and 30 June 2012 are main residence days for the purposes of the main residence exemption.
Further information is also available on our website - www.ato.gov.au - Guide to capital gains tax 2010-11 (NAT 4151-6.2011).