| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1052075525256
Date of advice: 20 January 2023
Ruling
Subject: CGT - main residence exemption
Question 1
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 the property was not inhabited by you?
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 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
Question 2
Are you entitled to a full main residence exemption on the sale of the property under section 118-110 of the ITAA 1997?
Answer
Yes.
You are able to disregard any capital gain made on the sale of your main residence in accordance with section 118-110 of the ITAA 1997.
Further information about this discretion can be found by entering 'QC 66028' 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 purchased a property on an Island (the property).
You moved into the property immediately after settlement.
Visiting the property is difficult due to its location.
You move to the property to enjoy the quieter life with your child who suffers from a severe medical condition.
While you thought the property would be an ideal location for you and your child, it ended up being very problematic.
A short time after you moved into the property you were offered a new job on the mainland.
You decided to move back to the mainland.
Approximately 1 month after you moved into the property you began moving out of the property.
As soon as you moved out of the property you placed the property up for rent.
Soon after the property was rented out.
Since moving out of the property, you did not own or treat any other property as your main residence for the purpose of the main residence exemption for the period the property was rented out.
You sold the property.
Approximately two years after you purchased the property settlement occurred on the property.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-110
Income Tax Assessment Act 1997 section 118-135
Income Tax Assessment Act 1997 section 118-145