Private ruling: Main residence exemption for foreign residents
Date of advice: 30 March 2020
Published: May 2020
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to apply the main residence exemption and disregard the capital gain you make where the disposal of the property occurs prior to 30 June 20XX? | A1: Yes Having considered your circumstances and the relevant factors you are entitled to apply a capital gains tax exemption for the disposal of your main residence. In your case the property was purchased prior to 9 May 2017 therefore you satisfy the existing requirements 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

Relevant facts and circumstances: You were a citizen of Country A living in Australia for several years on a permanent residency visa until mid 20XX. While living in Australia you purchased a property which you used as your main residence. Some years later you visited your family in Country A and stayed there for several weeks during which time you remained an Australian resident for tax purposes. After you visited your family you moved to Country B to commence employment on a permanent basis. Accordingly, you became a non-resident of Australia for tax purposes and became a resident of Country B from that time. You have no intention to return to Australia for the foreseeable future Your Australian residence was used as a rental property from the time you moved to Country B permanently until the property was sold. Due to your non-residency status, the foreign resident capital gains withholding payment has been applied by the buyer on your behalf. You did not purchase another main residence in Australia or overseas during the period the Australian property was rented out for a period of less than 6 years and you continued to nominate it as your main residence.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 118-110 | Income Tax Assessment Act 1997 section 118-145 | Income Tax (Transitional Provisions) Act 1997 section 118-110