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Ruling
Subject: Capital gains tax - main residence
Question
Are you entitled to a main residence exemption on your property?
Answers
Yes.
This ruling applies for the following period
Year ended 30 June 2012.
The scheme commenced on
1 July 2011.
Relevant facts
You purchased a home which was used as your main residence.
You got married and moved in with your spouse a number of years later.
You sold your marital home and moved back into your pre marital home for a short period of time.
You and your spouse treated your premarital home as your main residence for this period.
You treated no other dwelling as your main residence for this period.
You never used the property to derive income.
You and your spouse moved out of your premarital home and purchased another home which you are now treating as your main residence.
The pre marital home has been vacant since moving out and is on the market.
You and your spouse moved your personal items into the house and had all mail coming to the house.
You changed your details on the electoral roll.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-110
Reasons for decision
Capital gains tax - main residence
Section 118-110 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that you can disregard a capital gain or capital loss made from a capital gains tax (CGT) event that happens to a dwelling that is your main residence. To qualify for full exemption, the dwelling must have been your main residence for the whole period you owned it, the ownership period, and must not have been used to produce assessable income.
Whether a dwelling is a taxpayer's sole or principal residence is an issue which depends on the facts in each case. Some 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 taxpayers 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
You and your spouse moved into your pre marital home over a period of time. Neither of you treated any other dwelling as your main residence for this period.
You had your mail coming to this house along with moving all your personal items in. You and your spouse changed your details on the electoral roll.
You both moved out in and purchased a home which is now your main residence.
The premarital home has been vacant since moving out.
You are entitled to the main residence exemption on your pre marital home for the short period you lived in it.