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Edited version of private advice
Authorisation Number: 1051633816502
Date of advice: 10 February 2020
Ruling
Subject: Main residence exemption
Question 1
Did your property held overseas (the Property) meet the conditions of a dwelling under section 118-115 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes, the fact that your property was held overseas does not impact on the application of section 118-115 of the ITAA 1997. The Commissioner considers that your property met the conditions of a dwelling.
Question 2
Can you apply section 118-145 of the ITAA 1997 to exempt the Property from CGT, if disposed within six years?
Answer
Yes, the Commissioner considers that the property continued to be your main residence prior to its sale. The property was rented out for a period of time, this period of time was less than six years and the absence rule can apply. Accordingly, the property can be treated as your main residence for capital gains tax purposes for your entire period of ownership and you can disregard the gain made on its disposal. Further information about this discretion can be found by searching 'QC 52189' on ato.gov.au.
This ruling applies for the following period:
1 July 20xx to 30 June 20xx
The scheme commences on:
1 July 20xx
Relevant facts and circumstances
You are a citizen of Country A. In 20xx you acquired a property in Country A (the Property) as a sole owner and moved in as soon as practically possible with your family.
Your Property was used as your main residence from the date of acquisition and was not used for income producing activities whilst you were living overseas.
A few years later, you relocated with your family and belongings to Australia and were granted Australian permanent residency on the same date. You leased another property in Australia following your arrival.
After you arrived in Australia, you rented the Property for less than X years and sold it.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-115