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Edited version of your private ruling
Authorisation Number: 1012000106863
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Subject: capital gains tax - main residence - absence choice
Question: Is any capital gain or capital loss made on the disposal of dwelling C disregarded?
Answer: Yes
This ruling applies for the following period
Income year ended 30 June 2012
The scheme commenced on
1 July 2011
Relevant facts
You and your partner jointly owned a dwelling, Dwelling A.
You and your partner separated and you moved out of Dwelling A into Dwelling B.
Dwelling A was rented out after you moved out.
You did not make an absence choice in relation to Dwelling A.
You purchased a dwelling, Dwelling C, after 20 September 1985 and moved into it as soon as practicable.
You lived in Dwelling C for a number of months and then moved into Dwelling D.
Dwelling C has been rented out from the time you moved out until the present time.
You have made an absence choice in relation to Dwelling C.
You moved into Dwelling A when the tenant was evicted a number of months after you had moved into Dwelling D.
You will dispose of Dwelling C in the near future.
You have provided copies of a number of documents, which form part of and should be read in conjunction with this private ruling.
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 118-110
Income Tax Assessment Act 1997 Section 118-145
Reasons for decision
Generally, you can disregard any capital gain or capital loss you made from the disposal of your dwelling when:
§ The dwelling was your main residence for the whole of your ownership period;
§ You did not earn assessable income from the dwelling while you lived there;
§ You did not choose to treat any other property as your main residence during any part of your ownership period, and
§ The dwelling is less than two hectares in size.
When a dwelling that was your main residence ceases to be your main residence, you may choose to continue to treat it as your main residence even though you no longer live in it.
If you rent out the dwelling, you can choose to treat it as your main residence for up to six years after you cease living there.
In this case, you rented out your dwelling for less than six years and have made the choice to continue to treat it as your main residence.
The period covered by this choice, and the period that you actually resided in the dwelling cover your entire ownership period. Therefore any capital gain that you make on the disposal of the dwelling will be disregarded.