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Edited version of private advice
Authorisation Number: 1052041951244
Date of advice: 28 October 2022
Ruling
Subject: CGT - main residence exemption and absence rule
Question
Can you choose to continue to treat the property as your main residence under section 118-145 of the Income Tax Assessment Act 1997 (ITAA 1997) for the periods in which you were absent from the property?
Answer
Yes.
Having considered your circumstances and the relevant factors, under the absence rule in section 118-145 of the ITAA 1997 you can continue treating your former home as your main residence for up to 6 years for capital gains tax purposes for the period in which you were absent from the property.
However, you cannot treat any other property as your main residence for the time you applied the absence rule.
Further information about this discretion can be found by entering 'QC 66030' and 'QC 66032' into the search bar at ato.gov.au
This ruling applies for the following period:
Year ended 30 June 20XX.
The scheme commences on:
1 July 20XX.
Relevant facts and circumstances
You and your spouse purchased a dwelling located to live in as your main residence (the dwelling).
Settlement was delayed due to an issue with the vendor's bank.
You signed a lease agreement and moved into the dwelling before settlement occurred.
The dwelling took another 4 to 5 weeks to settle.
You resided in dwelling as your main residence for approximately 4 years.
You moved out of the dwelling and into another property in a different location.
The dwelling became a rental property when you moved out.
The dwelling was a rental property for approximately 2 years.
You moved back into the dwelling.
After approximately 5 months treating the dwelling as your main residence, you moved out of the dwelling and the dwelling became a rental property again.
The dwelling was a rental property for approximately 4 years.
You moved back into the dwelling.
Approximately 6 months after moving back into the dwelling, the dwelling was sold and settlement occurred on the dwelling.
In this time, you have not used the main residence exemption on any other dwelling.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-110
Income Tax Assessment Act 1997 section 118-145