Private ruling: CGT - main residence exemption
Date of advice: 7 February 2020
Published: March 2020
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can Mr X and Mrs Y apply the full main residence exemption on the disposal of their interest in the property and disregard the capital gain? | A1: Yes. As the property has been treated as a main residence during the ownership period and was purchased prior to xx/month/XX and disposed of prior to 30 June 20XX, the existing requirements are satisfied for the CGT main residence exemption. Further information on capital gains tax changes for foreign investors can be found by searching 'QC 52005' on ato.gov.au While the property was rented out for a period of time, this period of time was less than X years and the property continued to be treated as a main residence, therefore the absence rule can apply.

Relevant facts and circumstances: Mr X and Mrs Y are husband and wife. In XXXX Mr X and Mrs Y moved from Australia to Country A with their children as Mr X had gained an employment opportunity. They were provided with employer accommodation whilst living in Country A. In XXX XXXX Mr X and Mrs Y jointly purchased a residential property (the property). Mr X and Mrs Y were both considered to be non-residents of Australia for taxation purposes when the property was purchased. At the time of purchase Mr X did not expect to receive another renewal of his contract with his employer. The intention of purchasing the property was to provide a permanent home for their family to live. Mr X and Mrs Y both returned to Australia at the end of XXX. Mr X was then advised that his employment would be extended. Mrs Y stayed at the property for a short period of time from XXXX to XXXX. During this time she attended to medical appointments, made arrangements for personal belongings to be moved into the property, arranged for mail direction to the address of the property and also undertook some improvements to the property. Mr X resided at the property for some short stays between XXXX and XXXX, before they both returned to Country A on XXXX and stayed there until XXXX. Whilst living in Country A Mr X and Mrs Y were provided with employer accommodation. Mrs Y would return to Australia and reside at the property for short stays with the children. These stays were no longer than six months at a time. She was required to attend medical appointments and parent-teacher interviews. Mrs Y had also commenced a course so was required to return to attend several lectures and exams at the college . The property was not rented for the period from XXXX to XXXX. Mr X and Mrs Y returned to Australia in XXXX to live in the property and resided here until the end of XXXX. Mr X received another employment opportunity in Country A. Mr X and Mrs Y returned to Country A at the end of XXXX and did not return to Australia until XXXX. Mr X and Mrs Y would both frequently return to the property and in XXXX they both returned to reside in the property for a period of six months. In XXXX Mr X's employment ended and arrangements were made for removal of items Country A to the property in Australia. Mr X and Mrs Y returned to Australia and resided in the property until XXXX. In XXXX Mr X and Mrs Y both moved to Country B as Mr X received another job opportunity. The property was rented out from XXXX up until it was sold. The property settled and was sold on XX XXX XXXX. Whilst living in Country A and Country B Mr X and Mrs Y have not held an interest in any other properties as their main residence. Mr X and Mrs Y have considered the property in Australia to be their main residence for tax purposes during their ownership period.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-110 | Income Tax Assessment Act 1997 subsection 118-145(1) | Income Tax Assessment Act 1997 subsection 118-145(2)