| 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: 1052182504661
Date of advice: 25 October 2023
Ruling
Subject: CGT - exemptions
Question
Can the Commissioner disregard any capital gain or loss you make on the disposal of your investment property?
Answer
No.
This ruling applies for the following period:
Financial Year ended 30 June 20YY
The scheme commenced on:
1 July 20YY
Relevant facts and circumstances
The Property was purchased on DD MM 20YY at $X.
The Property was used an investment property.
You had a medical condition that was confirmed by your doctor.
The medical condition disabled you to work full time for the last XX years.
You had done some piece work for employment.
One year after your diagnosis, you applied for Centrelink unemployment benefits and the disability support pension, but you did not qualify.
The Property was sold on DD MM 20YY for $X.
The Property was sold to finance your living.
Relevant legislative provisions
Income Tax Assessment Act 1997 Part 3-1
Income Tax Assessment Act 1997 section 104-10
Reasons for decision
The sale of the rental property is a disposal of a capital gains tax (CGT) asset. This has triggered CGT event A1 occurring under section 104-10 of the Income Tax Assessment Act 1997 (ITAA 1997).
Detailed reasoning
Section 104-10 of the Income Tax Assessment Act (ITAA 1997) states that CGT event A1 will happen if you dispose of a CGT asset. A capital gain or loss may be disregarded if it was purchased before 20 September 1985 or another exemption is available.
In your case, the property was purchased after 20 September 1985 and the property was always used for income producing purposes. There is no other exemption under the general CGT provisions.
The Commissioner does not have the discretion to disregard any capital gain or loss you make due to the disposal of an investment property.
The rental income received by the property was assessable income, therefore the disposal of the property will also be included in your assessable income.
Having considered the relevant facts, CGT event A1 occurred due to your disposal of the rental property. As there is not exemption from CGT, the normal CGT rules will apply to the disposal of the property.
You should note that you are also entitled to the 50% CGT discount in relation to the property because you owned it for more than 12 months.