Private ruling: CGT application of absence rule
Date of advice: 11 October 2017
Published: March 2018
Ruling period: Year ending 30 June 2018
Date scheme commenced: 1 July 2017

Ruling: Q1: Will you be eligible for a partial main residence exemption for a residential property under section 118-145 of the Income Tax assessment Act 1997 ? | A1: Yes You are eligible for a partial main residence exemption. As you have utilised this property for income producing purposes, the six year absence rule under section 118-145 of the Income Tax assessment Act 1997 allows you to treat it as your main residence for the period from June 200X to June 201X inclusive.

Relevant facts and circumstances: You purchased a property utilising this as your main residence. Later you purchased a second property moving into this property. The first property was rented. You are electing to treat the first property as your main residence, by applying the absence rule for a six year period. CGT will apply to the first property for the period post the six years. CGT will apply on the second property from purchase date until the end of the six year election.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 102-20 | Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Subdivision 118B | Income Tax Assessment Act 1997 Section 118-145 | Income Tax Assessment Act 1997 Section 118-185 | Income Tax Assessment Act 1997 Section 118-190 | Income Tax Assessment Act 1997 section 118-192


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