Edited version of private advice

Authorisation Number: 1051750606237

Date of advice: 8 September 2020

Ruling

Subject: Capital gains tax - main residence exemption

Question

Can you disregard any capital gain made on the sale of your property?

Answer

Yes. You are able to disregard any capital gain you will make on the sale of your main residence in accordance with section 118-110 of the Income Tax Assessment Act 1997 (ITAA 1997). You can continue to treat your dwelling as your main residence in your absence in accordance with section 118-145 of the ITAA 1997 indefinitely as you did not use the dwelling for the purpose of producing assessable income.

This ruling applies for the following period:

30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You own a property (The Property). You purchased the property for $XX,000 many years ago with your spouse as tenants-in-common. The property is zoned for Primary Production; however, it has never been used for Primary Production.

You own a property at XX, Suburb XX, State AA (The Property). You purchased the property for $XXX in 20XX with your spouse as tenants-in-common.

The property is zoned for Primary Production; however, it has never been used for Primary Production.

You have lived there since you purchased The Property with your spouse until a few years ago, at which time you both moved into rented premises due to declining health.

The total property size is less than X hectares. There have been no improvements made to The Property. Council rates state that land use is residential.

You plan to sell the property with the dwelling on it to your neighbour for $XXX. You expect to make a small capital gain on the sale of the Property

Assumptions made for the purposes of this ruling

You will exercise the absence choice in section 118-145 of the ITAA 1997 when you sell the Property.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 118-110

Income Tax Assessment Act 1997 section 118-145