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Edited version of your written advice
Authorisation Number: 1051221811897
Date of advice: 5 May 2017
Ruling
Subject: Capital gains tax - main residence exemption
Question:
Is the capital gain or capital loss made on the disposal of a specific address disregarded?
Answer:
Yes
This ruling applies for the following periods:
Year ending 30 June 2017
The scheme commenced on:
1 July 2016
Relevant facts
You acquired an interest in a dwelling. (the dwelling)
You moved into the dwelling as soon as practical after settlement and resided in the dwelling during your ownership period.
You do not own any other residential property in Australia or Internationally.
You sold the dwelling and settlement occurred in 2017.
Relevant legislative provisions:
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 118-110
Reasons for decision
Capital gains tax
Capital gains tax (CGT) is the tax you pay on any capital gain you make and include on your annual tax return. There is no separate tax on capital gains; it is merely a component of your income tax. You are taxed on your net capital gain at your marginal tax rate.
You make a capital gain or capital loss if a CGT event happens. The most common CGT event happens when you dispose of an asset to someone else, for example, if you sell or give away an asset.
A capital gain or capital loss will occur when a capital gains tax (CGT) event happens to a CGT asset. The most common CGT event is CGT event A1 which occurs when a CGT asset is disposed of.
Main residence exemption
Generally, you can fully disregard a capital gain or capital loss made on the sale of a dwelling that is your main residence if:
The dwelling was your home for the whole period you owned it
The dwelling was not used to produce assessable income; and
any land on which the dwelling is situated is not more than 2 hectares
In your circumstances, you acquired an interest in a dwelling and used the dwelling as your main residence and as accordingly you are able to disregard any capital gain or capital loss.